The Crypto Crimes Overview You Better Read!

In the last few years, we’re witnessing the widespread adoption of cryptocurrencies and, it’s expected that cryptocurrencies will gain global mainstream adoption within the next decade

For example, the most popular digital currency, bitcoin, is accepted by a number of prominent merchants and businesses worldwide, including Starbucks, Virgin Galatic,, Tesla, Peach Airline, Overstock, Microsoft, Namecheap, and Shopify, among others.

Moreover, even Google recently lifted its ongoing ban on cryptocurrency ads in search results, indicating that it might be exploring a future in cryptocurrencies. 

As of December 2018, the overall market capitalization of cryptocurrencies was $100 billion, which is more than the GDP of 127 countries.

All this sounds promising.

But with cryptocurrencies gaining in popularity, the number of crypto crime activities also exploded.

To put some highlights on the current state of crypto crimes, Chainalysis published an in-depth report about everything you need to know on this topic.

In this blog post, we summarized the most important information from the report.

So, without further ado, let’s dive in.

Cryptocurrencies are a honeypot for criminal activities

Because of its decentralized and semi-anonymous nature, cryptocurrencies are seen as the perfect tool for handling illegal money.

However, no matter of anonymity, crypto transactions are transparent and recorded on a public ledger. This means that we can track the transactions, and with the help of the right tools, determine their purpose: if they are being used for criminal activities.

And, that’s exactly what Chainalysis did. Their data showed that in 2019, scams made up the majority of crypto crimes, accounting for $8.6 billion in transactions.

Moreover, the report classifies crypto crimes in 2019, in six major categories. Here they are:

Money Laundering

Once someone owns cryptocurrencies, the question that arises is how to actually cash it out without facing authorities?

So, here is what criminals usually do: they send the coins to crypto exchanges. In 50% of the cases, those exchanges are Binance and Huobi.

Surprised? After all, these exchanges are subject to KYC regulations. Yes, but that’s where OTC brokers come in. You see, OTC brokers operate with legal companies and facilitate trades between buyers and sellers who can’t or don’t want to transact on an open exchange.

Scams – most common crypto crimes activity

Believe it or not, 2017 wasn’t the year with the biggest number of crypto scams. According to Chainalysis data, the Oscar goes to 2019. In fact, this year, scammers increased its revenue bringing in $4.30 billion worth of cryptocurrency from millions of victims.

Most of this comes from the Ponzi schemes, phishing, blackmail scam, and fake token sale.


The stories about cities and institutions suffering from economic damage after a ransomware attack are already familiar. From New Orleans and Johannesburg to hospitals and the United States military, it seems that everyone is vulnerable.

The Chainalysis data shows us that over $6.6 million were paid to ransomware-affiliated addresses in 2019. And data also tells us, that in 2019, 52% of ransomware attacks were tracked from North America.


As crypto exchanges improve their security, hackers are becoming more sophisticated. Just think about Coinheck hack worth of $534 million, or the notorious $473 million Mt. Gox hack in 2014.

Chainalysis also tells us that most of the hacks were done through social engineering and exploiting technical vulnerabilities. And in 2019, hacking attacks that shook the crypto world include:

  • Binance – $40,000,000 stolen
  • CoinBene – $105,000,000 stolen
  • Upbit – $49,000,000 stolen
  • BITPoint – $32,000,000 stolen

Darknet markets

In 2019, darknet markets increased their revenue doubling from 0.04% in 2018 to 0.08% in 2019. But, one thing remained the same: most of the darknet markets transactions went through exchanges.

Data also tells us that the main focus of the darknet markets are still drugs.

Terrorism financing – crypto crimes in service of political purposes

Because of the decentralized nature of blockchains, cryptocurrencies are the perfect tools for financing terrorism activities. Intelligence agents have difficulties at shutting them down, and it’s difficult to report publicly.

Let’s take a look at a prominent example. In 2016, Ibn Taymiyya Media Center (ITMC), the media wing of a jihadist group based in Gaza, organized a public crowdfunding campaign using cryptocurrencies.

Final words on crypto crimes

From the Chainanlysis point of view, the future of fighting with crypto crimes looks pessimistic. The tools and techniques continue to evolve and to adapt themselves to security measures.


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