Crypto Thefts and Ransomware Payments Surged While Drop in Total Illicit TXNs

Crypto thefts and ransomware payments surged in 2024 despite the low number of illicit transactions recorded this year. Data from a blockchain research firm suggests that funds stolen so far in 2024 are 84% higher than the previous year’s figure. Meanwhile, hackers have shifted attention to high-profile businesses, including centralized crypto exchanges (CEX), for greater returns.

Hackers Stole Over $1.58 Billion in Cyber Attacks

The blockchain analytics firm Chainalysis published a report on August 15 detailing cybercrimes and ransomware attacks on various firms, including crypto exchanges and multinational companies. The report reveals that on-chain fraudulent transactions dropped by 20% compared to the previous year’s numbers. However, funds stolen in hacks doubled from $857 million to $1.58 billion in the first seven months of 2024. Similarly, ransomware payments witnessed a 2% increase from $449.1 million to $459.8 million this year.

The ongoing year is the most significant fiscal year for ransomware payments. Cybercriminals have adopted a new strategy known as ‘big game hunting’ for robbing high-profile businesses. With this approach, hackers attack only a few prominent organizations to get larger payouts. Notably, this year, ransomware victims paid $75 million (the highest recorded ransom) to the Dark Angel group, an infamous hacker group.

The report disclosed that average ransom payments demanded by intruders skyrocketed from $200K to $1.5 million within six months. This surge indicates that ransomware attackers are moving to high-net-worth companies and larger businesses. Due to the fear of leaking sensitive data, such firms are more likely to pay large amounts of ransom.

Moreover, law enforcement agencies have disrupted multiple groups of ransomware attackers, including ALPHV/BlackCat and LockBit. Some of these scattered groups have now joined smaller and less effective strains, while others have established their independent groups.

Cybercriminals Targeting Centralized Crypto Exchanges

After four years of consistent attacks on decentralized protocols, cybercriminals are shifting to centralized exchanges. This move comes after the Bitcoin price soared heavily in 2024, with most of its trading activity on CEX. Since DeFi protocols are less popular with BTC trading, hackers use traditional tactics to target profitable centralized exchanges.

Surprisingly, Chainalysis reported that many North Korean cybercriminals have applied for IT jobs at targeted companies to gain access to their systems. This strategy enables hackers to utilize advanced social engineering methods to steal funds by offering crypto-related services to get huge payoffs from such companies.

Despite giant cyber attacks and ransomware activities, the crypto industry has witnessed several positive developments in the digital asset ecosystem. Crypto gained mainstream adoption in multiple ways, including the approval of spot Bitcoin and Ethereum Exchange-Traded Funds (ETFs) and the implementation of fair rules set by the Financial Accounting Standards Board (FASB). Moreover, the number of illicit activities is down 19.6% from 20.6 billion to 16.7 billion year-to-date (YTD), which suggests that legitimate activities are flourishing.

While commenting on the growth of legal transactions, Eric Jardine, Cybercrimes research lead at Chainalysis, noted in a statement:

It is highly encouraging to see that criminal activity continues to become an ever-shrinking share of the crypto ecosystem. The growth of legitimate activity outpacing that of illicit activity on-chain demonstrates the continued transition of cryptocurrencies to the mainstream.