Blockchain Analysis Software company Chainalysis has previewed information of its upcoming 2022 Crypto Crime Report revealing that crypto crime is at the moment quite low.
According to Chainalysis from 2020 to 2021 there was an increase of over $7 billion in cryptocurrency-based crime with illicit address receiving $14 billion in the past year. This increase is due to the amount of people using cryptocurrency which has increased 567 per cent since 2020 in which the transaction volume has grown $15.8 trillion in 2021.
Although the numbers may appear to incite a negative trend, Chainalysis states that while the increase was 79 per cent that “the growth of legitimate cryptocurrency usage [is] far outpacing the growth of criminal usage, illicit activity’s share of cryptocurrency transaction volume has never been lower,” the report said. Only 0.15 per cent of cryptocurrency transaction was considered to be illicit.
NewsCop talked to Dr Dennis Desmond a Cyber Intelligence Lecturer at the University of the Sunshine Coast (USC) who said that while at the moment crypto crime appears to be low it may see an increase as cryptocurrency grows in popularity.
“With fiat currencies such as the Australian dollar and US dollar, criminals will continue to look for new ways to defraud people and cook up new variants of the old tried and true crimes they have used successfully in the past,” he said.
“Certainly, with the rise of cryptocurrency as an investment platform, many people are unfamiliar with cryptocurrencies and know little about their assets and are likely to fall victim to scams involving cryptocurrencies,”
“Before investing, people need understand the risks, and understand how cryptocurrencies are stolen or used in fraud.”
Dr Desmond further remarked on how exactly crypto criminals go about stealing digital currencies such as Bitcoin or Shiba Inu.
“Digital currencies may be stolen through schemes wherein investors and cryptocurrency holders are fooled into giving away their passphrases to criminals who are then able to transfer away (steal) all of the cryptocurrencies held by the victim,” he said.
“Another type of fraud is called a rug-pull [and] in these frauds, criminals either promote a coin/token and wait until they are heavily invested and then steal the investor’s money without any remuneration or settlement,”
“One of the most common types of crime that we’re seeing involve ransomware wherein victims click on a phishing email, click on a hostile link on a website or SMS message, or install software, illicit music or movies and their devices are infected,”
“Typically, criminals who may be in another country will demand payment in cryptocurrencies to release files or access the network.”
A famous ‘rug-pull’ that Dr Desmond was referring to involved a new cryptocurrency that was called Squid Game (SQUID) after the hit Korean TV show Squid Games. The creators and scammers of this cryptocurrency cashed in more than $3million after selling the holdings taking all the money investors put in the company.
Dr Desmond recommends that “if people are going to invest in cryptocurrencies, I would suggest they do so with a globally recognized cryptocurrency exchange” and to always “do your research!”.