Ransomware and Theft: the Year 2024 Sees a Rise in Crypto Hacks

The growth of the crypto space has led not only to technological and economic leaps, which have undoubtedly had a positive impact on the global community. Progress, after all, is generally welcomed. However, as with any endeavor, there’s always a flip side. On the reverse side of the “cryptocurrency” coin, the word “cryptoscams” is becoming increasingly visible. The more developed the first side becomes, the more sophisticated the second one gets.

The analytics service Chainalysis released a mid-year report indicating that in 2024, the percentage of cryptocurrency thefts and fraudulent operations using ransomware has increased. In our new article, we explore how this affects the overall crypto landscape and what to expect in the future.

2024: Bitcoin Price Surge

Chainalysis experts noted a sharp increase in crime in the cryptocurrency sector in 2024. What’s behind this? First, it’s important to mention that these conclusions were drawn in contrast to 2023, a year when cybercrimes related to digital assets decreased by nearly 50%. A brief analysis reveals a direct correlation between these events and the value of the world’s leading cryptocurrency, Bitcoin (BTC). While Bitcoin experienced a decline in 2023, the situation has now stabilized. Compared to the previous year, Bitcoin has risen by 130%, reaching $60,091 in July 2024.

The number of hacks has increased by only 2.8% compared to last year, but when combined with the 50% stabilization, it results in a rather significant figure.

Centralized Exchanges at Risk

In recent years, the rapid development of decentralized exchanges has captured all the attention. Their unique structure, regulatory challenges, and security issues provided fertile ground for crypto scammers. As a result, the operations of centralized organizations were pushed to the background.

By 2024, the situation has shifted. Chainalysis reported that centralized exchanges are now facing as much hacking risk as decentralized ones. The surge in hacker activity hasn’t been seen in the past four years. Most attacks occur in the United States, where around 49.95% of all incidents take place.

Hackers are primarily attracted to the sums involved in centralized organizations. With a “successful” hack, they could walk away with tens or even hundreds of millions of dollars, which far exceeds the thousands stored on decentralized platforms.

For instance, in May 2024, the largest cryptocurrency theft occurred when the Japanese exchange DMM lost about $305 million. Scammers managed to access a private key and steal Bitcoins.

Analysts link this trend to the overall growth of crypto assets held by centralized platforms.

A “Profitable” 2024 Fills Scammers’ Wallets

Despite increased scrutiny of cryptocurrency exchanges, enhanced security systems, and various inspections, 2024 (as of August) remains the most profitable year for crypto scammers in history.

Let’s look at a record-breaking case. In early 2024, the Chainalysis team discovered a victim who paid $75 million in a single transaction to scammers. This record amount was transferred to the Dark Angels company. The victim has not been identified.

This precedent has raised concerns within the crypto community. Companies are now afraid that criminals will try to surpass Dark Angels’ fraudulent success and further develop their deception tactics. Such eagerness among crypto hackers could indeed pose a serious problem for the entire community.

Previously, the largest recorded payment to scammers was $40 million, transferred to Evil Corp. For comparison, the safest year was 2022, when scammers managed to extort only $17 million from a victim. In 2021 and 2023, these amounts were roughly similar, at $38.9 million and $37.8 million, respectively.

Conclusion

Analysts’ forecasts for the future of the industry are not particularly encouraging. It’s undeniable that the industry is evolving on both fronts — progressive and constructive, as well as “shadowy” and fraudulent. Tactics are becoming more sophisticated, with a multi-layered approach flourishing on both sides. The positive aspect is that cryptocurrency companies are highly motivated to elevate their products to new security levels, meaning they are unlikely to cut corners.

In any case, experts advise against panic. They note that increased regulation and the involvement of law enforcement in the crypto world are having a positive effect. A reduction in overall illegal activity in the crypto space is already being observed.

If you want to learn more interesting facts about crypto then check out our blog! You might like our articles “Segregated Witness (SegWit) in Bitcoin” and “Top Cryptocurrency Mining Companies in the U.S.”.

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SimpleSwap reminds you that this article is provided for informational purposes only and does not provide investment advice. All purchases and cryptocurrency investments are your own responsibility.