The latest Chanalysis report has revealed that criminal crypto whales hold more than $25 billion in cryptocurrency from a multitude of illicit sources.
The dossier – a preview to its soon-to-be-released 2022 Crypto Crime Report – showed that, at the end of 2021, criminals identified by Chanalysis held $11 billion in crypto assets, compared to just $3 billion the previous year.
Stolen funds in 2021 accounted for 93 per cent of all criminal balances at $9.8bn. Darknet funds accounted for $448 million, scams were $192 million, while fraud shops were at $66 million, and ransomware at $30m.
In total, Chainalysis identified 4,068 criminal whales – criminals holding more than $1 million in crypto – who, as a group, hold a staggering $25 billion worth of cryptocurrency.
However, the report points towards positive examples of law enforcement’s growing ability to seize cryptocurrency from criminals.
Highlighted examples in 2021 included:
- The U.S. Department of Justice (DOJ) seizing $2.3 million worth of cryptocurrency from the DarkSide ransomware operators responsible for the attack on Colonial Pipeline, as we cover in-depth in our ransomware section.
- IRS-CI’s cumulative seizures of more than $3.5 billion worth of cryptocurrency over the course of 2021.
- London’s Metropolitan Police Service (MPS) made the UK’s largest ever seizure of cryptocurrency, taking £180 million worth from a suspected money launderer.
More recently in February 2022, the DOJ seized $3.6 billion worth of Bitcoin connected to the 2016 hack of Bitfinex, in what is currently the largest ever recovery of stolen assets in either cryptocurrency or fiat.
“These stories are important not only because they allow financial restitution for victims of cryptocurrency-based crime, but also because they disprove the narrative that cryptocurrency is an untraceable, un-seizable asset perfect for crime,” the report stated.
“If cybercriminals know law enforcement is capable of seizing their cryptocurrency, it may lower their incentive to use it in the future.
“These cases also raise an important question: How much cryptocurrency is currently held by known criminal entities on the blockchain, and could therefore theoretically be seized by law enforcement? The answer is a function not just of cryptocurrency-based crime revenue in 2021, but of the all-time criminal revenue still held by visible addresses.”