Chainalysis-Crypto-Crime（链分析加密犯罪）-2021-113页_55mb

2021 Crypto Crime Report Summary

Core Content

The 2021 Crypto Crime Report provides an analysis of cryptocurrency-related criminal activity in 2020, highlighting the decline in illicit transactions, the major crime categories, and the mechanisms used by cybercriminals to launder funds. It also includes case studies that illustrate how traditional crimes are being integrated with cryptocurrency.

Main Points

1. Overview of Cryptocurrency Crime in 2020

• Overall Decline in Illicit Activity: Cryptocurrency-related crime decreased significantly in 2020, with the illicit share of all cryptocurrency activity dropping to 0.34% or $10.0 billion, compared to 2.1% or $21.4 billion in 2019.
• Covid-19 Impact: The global economic activity nearly tripled between 2019 and 2020, contributing to the decline in the illicit share.
• Ransomware as the Big Story: Despite representing only 7% of all funds received by criminal addresses, ransomware saw a 311% increase in value compared to 2019, due to increased vulnerabilities from remote work arrangements.
• Estimated Economic Losses: Ransomware attacks caused $20 billion in economic losses in 2020, including downtime for businesses and governments.

2. Major Crime Categories

• Scams: Still the largest category, accounting for 54% of illicit activity, or $2.6 billion in cryptocurrency received.
• Darknet Markets: Second-largest category, receiving $1.7 billion in 2020, up from $1.3 billion in 2019.
• Stolen Funds: A notable category, with $800 million in illicit funds received in 2020.
• Terrorism and Extremism Financing: Represented a smaller portion but still significant.
• Other Activities: Include child abuse material, sanctions evasion, and offline criminal activity that converts fiat to cryptocurrency.

3. Money Laundering Trends

• Concentration of Illicit Funds: A small number of service deposit addresses are responsible for a large share of illicit transactions.
• Top 5 Services: Received 55% of all funds sent from illicit addresses in 2020, with the top two services remaining consistent over the years.
• Ransomware Concentration: 78% of ransomware-related funds went to the top 5 services.
• Illicit Share of Funds: A group of 270 deposit addresses received 55% of all illicit funds, while 24 deposit addresses received over $500 million worth of illicit cryptocurrency.
• Geographic Distribution:
  • United States: Overrepresented in scam and stolen fund transactions.
  • Russia: Received a disproportionate share of darknet market funds, largely due to Hydra.
  • China: Received significant funds from ransomware and scams, possibly linked to the North Korean-affiliated Lazarus Group.
• Nested Services: These services operate within larger exchanges and are often used for money laundering. They are more likely to be involved in illicit activities than mainstream exchanges.

4. Case Studies

Case Study 1: Russia-Based Money Laundering Ring

• OTC A: A Russia-based OTC broker that received $265 million in cryptocurrency since 2018, with over $2 million from ransomware and $13.9 million from darknet markets.
• Instant Exchanger 1 (IE 1): A Russia-based instant exchanger that received $8.7 million directly from OTC A and $1.4 million through 28 intermediary wallets.
• Process: Funds from illicit addresses are converted into Tether (USDT_ETH) and sent through a network of intermediaries to IE 1, where they are converted into fiat.

Case Study 2: Harrod's Drug Trafficking Ring

• Traditional Money Laundering: A UK-based drug trafficking ring used traditional methods to launder funds, such as cash handovers and serial number verification.
• Cryptocurrency Integration: The ring used cryptocurrency transactions to move funds overseas, with collectors responsible for the actual transfers.
• Evidence Recovered: Police recovered a list of several Bitcoin addresses and bill serial numbers from one of the collectors.

Key Information

• Ransomware Growth: Ransomware saw a significant increase in 2020, likely due to the rise in remote work and digital infrastructure reliance.
• Underreporting: Ransomware estimates are considered lower bounds due to underreporting and the difficulty in tracking all transactions.
• Compliance and Monitoring: The report emphasizes the need for better compliance and transaction monitoring by services, especially those operating in high-risk jurisdictions.
• Nested Services: These services are increasingly used by cybercriminals to launder funds, often without proper oversight.
• Impact on Law Enforcement: Targeting money laundering services can significantly reduce the ability of cybercriminals to convert cryptocurrency into cash.

Conclusion

The report concludes that while cryptocurrency-related crime is declining, it remains a critical concern. Ransomware, despite its smaller share, is a growing threat due to its destructive nature and increasing frequency. The integration of cryptocurrency into traditional criminal activities also highlights the need for more comprehensive monitoring and regulation. By understanding these trends, law enforcement, regulators, and the private sector can work together to make the cryptocurrency ecosystem safer.