Crypto Crime Update: New Trends Emerge in 2024

As the digital currency landscape evolves, so do the tactics of cybercriminals. Recent data from Chainalysis reveals significant shifts in crypto crime patterns for 2024.

Disturbingly, Chainalysis reports that networks distributing child sexual abuse material (CSAM) are showing signs of growth, particularly those based in China. These illicit operations now account for a larger share of global CSAM-related cryptocurrency inflows, peaking at 38.8% in Q1 2024.

While the exact reasons for this increase remain unclear, blockchain data suggests these are emerging trends rather than previously undetected activities.

Scammers Adapt Their Strategies

The world of crypto scams is also changing rapidly. Scammers are moving away from large-scale Ponzi schemes in favor of more targeted approaches like “pig butchering” scams. These scams involve building fake relationships with victims over time before convincing them to invest in bogus opportunities.

Interestingly, 43% of scam-related crypto inflows in 2024 so far have gone to wallets that became active this year. This indicates a surge in new scam operations. The average lifespan of scams has also decreased significantly, from 271 days for those starting in 2020 to just 42 days for scams beginning in 2024.

Despite this trend towards shorter-lived scams, some larger operations persist. One notable example is a wallet linked to a Myanmar-based scam compound that has netted over $100 million this year alone.

A concerning development is the growth of online marketplaces facilitating various cybercrimes. One such platform, Huione Guarantee, has processed a staggering $49 billion in cryptocurrency transactions since 2021. This marketplace connects buyers and sellers for a wide range of illicit activities, including fraud, money laundering, and the sale of hacked social media accounts.

Scammers are increasingly purchasing these compromised accounts to carry out their schemes. In fact, crypto payments to services selling social media profiles have steadily increased over the past two years, totaling about $10.5 million.

The Big Picture of Crypto Crime

While overall illicit crypto activity has declined by nearly 20% year-to-date, certain areas like ransomware and stolen funds have seen significant increases. This highlights the dynamic nature of crypto crime, with bad actors constantly adapting their methods.

Law enforcement agencies and blockchain intelligence firms continue to work tirelessly to combat these evolving threats. However, the crypto community must remain vigilant and educated about potential risks.