Despite the COVID- 19 affecting the world in 2020, cryptocurrency saw a rise driven by demand for institutional investors. While cryptocurrency still attracts illicit entities, cryptocurrency related crimes saw a decline in 2020, as per a Chainalysis crypto crime report.

Data from the report stated that 2019 saw illicit activities representing 2.1% of the total cryptocurrency transaction volume or around $21.4 billion worth of transfers. However, in 2020 cryptocurrency related crimes decreased to 0.34% or $10 billion in transaction volume. Between 2019 and 2020, as overall economic activity increased by three times, the percentage of illicit activities declined.

According to the report, the cryptocurrency related scams made up for 54% of illicit activities which represented around $2.6 billion worth of cryptocurrency received, in 2019. Interestingly, 2020 didn’t see scams as big as the PlusToken Ponzi scheme, which took in over $2 billion from its victims. To be noted that darknet markets were again the second-largest crime category which accounted for $1.7 billion worth of cryptocurrency activity in 2020, compared to $1.3 billion in 2019.

In 2020, cryptocurrency based crime ransomware accounted for 7% of all funds received by criminal addresses worth under $350 million of cryptocurrency, which represented a 311% increase over 2019. No other category of cryptocurrency based crime saw such a rapid rise in 2020, the report claimed. As per expert estimation, ransomware cost $20 billion in economic losses in 2020, including losses from payment and from businesses and governments being taken offline in attacks.

(With insights from the Chainalysis Crypto Crime Report, 2021)