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A new report shows that while general illegal transactions in the cryptocurrency market decreased in 2024, specific crypto-related criminal activities have increased. According to the first part of Chainalysis’ mid-year crypto crime update published on August 15, total illegal activity in crypto has decreased by 19.6% year-to-date (YTD), dropping from $20.9 billion to $16.7 billion by July 2024.
Chainalysis’ Noteworthy Report
Chainalysis found that legitimate crypto activity in 2024 grew faster than illegal activity in the ecosystem due to positive industry events such as the adoption of spot Bitcoin and Ethereum exchange-traded funds in the US. Despite positive developments in the first half of 2024, Chainalysis warned of increases in two major types of illegal activities: stolen funds and ransomware.
Chainalysis reported that after a 50% decline in 2023, crypto hacking activity has seen a significant resurgence in 2024. According to the latest update, the cumulative value of stolen cryptocurrencies exceeded $1.58 billion by the end of July this year. The report notes that this amount is already 84% higher than the value stolen during the same period in 2023.
Chainalysis highlighted that the number of hacking incidents in 2024 slightly surpassed those in 2023, increasing by only 2.8% from the previous year. The average value compromised per hack rose by 79.5%, from $5.9 million per incident in 2023 to $10.6 million per incident so far in 2024.
Most of the change in compromised value was a result of rising prices in crypto markets. Chainalysis stated that the average price of Bitcoin increased by approximately 130%, from $26,141 in the first seven months of 2023 to $60,091 by July 2024.
Details on the Subject
Chainalysis also found that after focusing on decentralized exchanges for four years, crypto thieves have returned to targeting centralized exchanges (CEX). CEXs were hacked for higher values in 2024, with platforms like the Japanese DMM exchange losing $305 million in Bitcoin due to a private key hack in May 2024. Chainalysis reported that this hack represented approximately 19% of the total value stolen in crypto hacks in 2024.
Chainalysis’ cybercrime research leader Eric Jardine stated that the resurgence of CEX hacks in 2024 could be a result of increased volumes in CEX compared to decentralized finance (DeFi) services:
“It is unclear whether this trend is entirely opportunistic or if the value of assets held by centralized services, which act as custodians of large amounts of user funds, has become relatively more attractive compared to DeFi services.”
