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Crypto Crimes Have Skyrocketed in the Last Year, Data Shows

— February 15, 2023

Online currency crimes are expected to continue to increase as cryptocurrency becomes more popular.

Crypto crimes hit a record $22 billion in 2022, more than quadrupling from just two years before (in 2020, at $4.3 billion). As expected, most of this criminal activity has been happening beyond U.S. borders – especially in Russia, Ukraine and China – where regulatory oversight for crypto exchanges and trading services remains relatively lax when compared to other countries. In fact, the research, carried out by blockchain analytics firm Chainalysis, shows 89% of these crimes were perpetrated outside of the United States.

The report also found that crypto theft was one of the most common sources of crypto crime, accounting for 38% of losses. Other major sources included scams (32%), ransomware (17%) and Ponzi schemes (13%). Interestingly, only 0.3% of funds were lost as a result of these underground.

Crypto Crimes Have Skyrocketed in the Last Year, Data Shows
Photo by Anthony from Pexels

Other key findings noted in the data include:

“ – Crypto extortion rackets increased by 128%, amounting to $2 billion in losses;

– Crypto fraud increased by 59%, totaling $10 billion in losses;

– Money laundering with cryptocurrencies has grown substantially since 2018, though only accounts for 7% overall;

– Most stolen funds originate from exchanges and wallet services rather than individual users.”

Though these alarming figures seem to demonstrate an increasing issue with crime facilitated through cryptocurrencies, they are still comparatively low when leveraged against other types of financial crimes such as credit card fraud ($45 billion globally) and check fraud ($20 billion worldwide).

Given how unprepared many investors are when it comes to protecting themselves against financial crimes associated with cryptocurrencies, experts are stressing that extra caution is needed when using digital money platforms and exchanges as well as practicing basic security measures such as not sharing private key information online. It is also important for regulators to establish stronger safeguards against crypto-based financial crimes which means ensuring compliance with anti-money laundering laws around the world.

Investing in digital currencies poses significant risks due to its association with illegal activities; however, there are various advantages it can bring, such as providing faster payment processing times compared to traditional banking systems and greater transparency between parties involved in any transaction.

As people become more aware of these benefits, they should pay close attention to potentially fraudulent activities associated with crypto so they can make informed decisions.

Cryptocurrency’s potential impact on criminal behavior will be extremely relevant throughout 2023 since hackers are constantly finding new ways to exploit existing vulnerabilities within digital currency networks, including weak cryptography protocols or lack of user authentication procedures. To combat this problem, authorities are providing greater public education on cybersecurity best practices for traders engaging with these investments. With these precautions in place, we may see fewer instances of crypto-based theft and fraud this year onward which can consequently bring more stability and reliability within the markets.

Cryptocurrency is still a relatively new form of currency, and as such, it faces many risks associated with financial crime. It’s important for investors to be aware of the potential dangers posed by criminals taking advantage of digital money networks for illegal activities. Regulators must also ensure compliance with anti-money laundering laws around the world in order to better protect users from crypto-based financial crimes. With greater awareness, education on cybersecurity best practices, and stricter enforcement against criminal behavior, instances of theft and fraud should decrease this year, and in the years to follow.


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