Crypto: 4% of whales are criminals and control $25 billion


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Investing.com – Data from Chainalysis shows that 4,068 criminal whales (about 4% of all whales) control more than $25 billion worth of cryptocurrencies between them.

Chainanalysis defines criminal whales as any private wallet that holds more than $1 million worth of cryptocurrencies, with more than 10% of funds received from illicit addresses linked to activities such as scams, fraud, and malware .

“Overall, Chainalysis has identified 4,068 criminal whales holding over $25 billion worth of cryptocurrencies. private wallets holding over $1 million worth of cryptocurrencies,” the report read.

The data shows that 1,374 whales received between 10% and 25% of their pay from malicious sources, while 1,361 received between 90% and 100%. Those whose balance came from illicit funds between 25% and 90% totaled 1,333 criminal whales.

“While stolen funds dominate overall criminal balances, darknet markets are the largest source of illicit funds sent to criminal whales, followed by scams in second place and stolen funds in third place,” reads The report.

Crypto criminal activity is on the rise

In terms of illicit transaction activity, the report found that criminal addresses received over $14 billion in 2021, marking a huge 79% increase from the $7.8 million seen in 2020.

The lion’s share was attributed to the scam, which grew 82% year-over-year to $7.8 billion. DeFi scammers in particular were highlighted as a key source of the $2.8 billion scam:

“We should note that approximately 90% of the total value lost by rug pulls in 2021 can be attributed to a single fraudulent centralized exchange, Thodex, whose CEO disappeared shortly after he shut down users’ ability to withdraw funds.”
Thefts also increased by 516% to account for $3.2 billion in illicit transaction activity, with the DeFi sector once again a concern.

The share of crypto criminal activities is falling

On the positive side, Chainalysis pointed out that the entire transaction volume in USD value in 2021 was around $15.8 trillion, with illicit addresses accounting for just 0.15% of that figure, compared to 0.34% the previous year.

“Crime is becoming an increasingly smaller part of the cryptocurrency ecosystem. The ability of law enforcement to combat cryptocurrency-related crime is also evolving. We have seen several examples of this throughout of 2021, from the CFTC’s indictment of multiple investment scams, to the FBI’s takedown of the prolific REvil ransomware strain, to OFAC’s sanctioning of Suex and Chatex,” says The report.

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