Cryptocurrency Heists, Ransomware Payments to Drop 30% by 2024!
Over the past few years, cryptocurrency crime has been rising, not just in number but also in sophistication. It has overtaken the news, particularly in 2021. However, contrary to the current trend, Gartner predicts that cryptocurrencies will not be lucrative for cybercriminals.
According to Gartner’s ‘Predicts 2022: Prepare for Blockchain-Based Digital Disruption’ report, cryptocurrency heists and ransomware payments will experience a 30% drop by 2024.
In the case of current legacy payment networks, cybercriminals are exploiting various blockchain addresses and self-hosted wallets to move their stolen funds, making it almost impossible for companies to figure out their identity.
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However, Gartner predicts that it would be challenging for criminals to transfer and spend stolen funds off blockchain networks. All thanks to smart blockchain analytics.
Smart blockchain analytics makes it a cakewalk for companies to follow money trails on blockchains.
Blockchain networks are already more transparent than fiat payment networks, making blockchain payments and fund transfers much easier to trace. In fact, high-profile crypto hacks in 2021, including Poly Network Hack, resulted in criminals returning stolen funds. Some companies are already leveraging advanced blockchain forensics to trace and identify blockchain addresses where stolen funds are parked.
As of today, around 23 blockchains account for 99% of blockchains’ market cap. So, investors can integrate effective anti-blockchain-fraud systems or advanced blockchain forensics with just 23 blockchains rather than thousands of payment networks.
However, gleaning meaningful insights from non-descript blockchain metadata and applying real-time ML and analytics to that data is a herculean task. Nevertheless, once the data insights are gathered, the crypto companies can gain optimal visibility across the blockchain platforms, trace criminals, and identify abnormal money transfer patterns.
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Some vendors such as Chainalysis Ciphertrace, Elementus, and TRM Labs are already offering these intelligence blockchain forensics services to authorities who are investigating crypto heists. Exchanges and DeFi protocols are increasingly using these services to prevent fraud in the first place. Taking cognizance of this trend, Gartner predicts that the adoption of rapidly advancing blockchain intelligence and fraud prevention tools will become mainstream, bogging down cryptocurrency crime.
Apart from the growing adoption of smart blockchain analytics, governments worldwide are taking steps to make it challenging to use cryptocurrency for criminal purposes.
Some of the facts noted by Gartner are:
- The American Government has started making concerted efforts to stave off ransomware attacks. It has already issued sanctions against a Russian cryptocurrency exchange exploited by cybercriminals.
- In June 2021, the US Law Enforcement recovered USD 2.3 million, almost half of nearly USD 5 million in bitcoin, paid to a criminal gang that conducted a ransomware attack on the Colonial Pipeline.
- Investigators are analyzing blockchain and off-chain curated data to identify blockchain addresses where stolen funds are parked, making it increasingly difficult for criminals to cover their blockchain tracks.
All these trends collectively indicated that it is becoming onerous for criminals to commit cryptocurrency heists and move stolen funds off cryptocurrency networks.
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Blockchain networks are not anymore havens for crypto criminals. The graph below illustrates that aspect. It analyzes illegal Bitcoin transactions per four different companies. The data shows that transactions that go through VASPs are less likely to be criminal transactions than those that go through self-hosted wallets or non-VASPs.
Bottom Line:
Undoubtedly, blockchain fraud prevention and intelligence is ramping up quickly. However, the need of the hour is to democratize these fraud prevention tools so that individual users can acquire them directly. With these tools at their disposal, users can proactively avoid transferring funds to a criminal address.
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