Cyber Criminal Whales: The Rise of Crypto Syndicates

3 min read
Cyber Criminal Whales

Learn about the rise of crypto crimes, criminal whales, and the funding of criminal's crypto wallet.

Crypto crime is undoubtedly an ever-present risk to both huge projects and your everyday retail investor. Syphoning billions in digital assets, several illicit transactions find their way to a few crypto wallets⁠ — owned by cybercriminal whales.

Early this year, authorities seized over $3.6 billion worth of $BTC in what was their largest seizure of stolen assets yet.

While some cyber criminals may be on a solo hunt of their own, it’s possible organised networks are responsible for most crypto crimes.

From intricate scams and hacks to million-dollar exploits, it’s likely these cybercriminal whales aren’t acting alone. Big fish, little fish.

So, Where Do Most Criminal Wallet Funds Come From?#

Over the last five years, there has been a significant increase in criminal balances in 2021, according to Chainalysis’ Crypto Crime Report 2022. In 2021, they held over 11 billion US dollars of digital assets sourced from suspected illicit addresses, a far cry from 2020's $3 billion.

Stolen funds make up most of the illicit transactions that bloat cybercriminal whale wallet addresses. By the end of 2021, $9.8 billion of funds held by criminal balances came from cryptocurrency theft.

It is the most damaging and frequent crypto crime activity. On this scale, it’s hard not to believe that organised groups are behind this work to exploit smart contract and code vulnerabilities.

Darknet market revenue is second to crypto crime activity at $448 million. Organised crime groups and individuals are infamous for most of what happens on the dark net. It’s possible cybercriminals use crypto for anonymity, speed, ease, and laundering.

On the more deceitful side of the criminal spectrum, scams and fraud have generated a combined $258 million. Scam exploits might as well be the most organised crypto crime of them all. Known for having massive email and SMS campaigns, a lot of influencer marketing, and amplifying investors’ FOMO.

Is Crypto Crime on the Rise?#

The complexity and reach of crypto crime show syndicates may as well exist in the blockchain. The modern-day criminal is no longer a mobster with a tailored suit. It’s invisible, unseen.

Known only by cryptic usernames and wallet addresses. Laptops and VPNs are their new hand-carry pistols. It may be less violent, but it is just as worse.

Because of crypto crime, blockchain projects built by passionate developers lose millions and their direction. Retail investors wake up the next morning with their wallets drained empty.

Alone, a cybercriminal can do only just as much. Together, they can form a highly organised crypto syndicate that steals, phishes, and/or exploits like clockwork.

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