4% of crypto whales are criminals and they have $25B between them: Chainalysis

Published at: Feb. 17, 2022

Chainalysis data shows that 4068 criminal whales (roughly 4% of all whales) are hodling more than $25 billion worth of cryptocurrency between them.

The blockchain analytics firm defines criminal whales as any private wallet that holds more than $1 million worth of crypto with over 10% of the funds received from illicit addresses tied to activity such as scams, fraud and malware.

The data is from the “Criminal Balances” section of the Crypto Crime Report that explores criminal activity on the blockchain over 2021 and early 2022. The wide-ranging report also covers topics such as Ransomware, Malware, Darknet markets and NFT related crime.

“Overall, Chainalysis has identified 4,068 criminal whales holding over $25 billion worth of cryptocurrency. Criminal whales represent 3.7% of all cryptocurrency whales — that is, private wallets holding over $1 million worth of cryptocurrency,” the report reads.

The data showed that 1,374 whales had received between 10% and 25% of their balance from nefarious sources, while 1,361 had between 90% and 100% . Those with balances between 25% and 90% of illicit funds totaled 1,333 criminal whales.

“Whereas stolen funds dominate overall criminal balances, darknet markets are the biggest source of illicit funds sent to criminal whales, followed by scams second and stolen funds third,” the report read.

Related: Chainalysis report finds most NFT wash traders unprofitable

Illicit transaction activity

In terms of illicit transaction activity, the report revealed that criminal addresses had received more than $14 billion in 2021, marking a whopping 79% increase compared to the $7.8 million seen in 2020.

The lion's share of that $14 billion figure last year was attributed to scamming which increased by 82% year-over-year to account for $7.8 billion. Decentralized Finance (DeFi) rug pulls in particular were highlighted as a key source of scamming at $2.8 billion:

“We should note that roughly 90% of the total value lost to rug pulls in 2021 can be attributed to one fraudulent centralized exchange, Thodex, whose CEO disappeared soon after the exchange halted users’ ability to withdraw funds.”

Theft also increased by 516% to account for $3.2 billion worth of illicit transaction activity, with the DeFi sector once again being an area of concern.

On the positive side, Chainalysis pointed out that all transaction volume in USD value in 2021 totaled around $15.8 trillion, with illicit addresses accounting for a mere 0.15% of that figure, down from 0.34% the year prior.

“Crime is becoming a smaller and smaller part of the cryptocurrency ecosystem. Law enforcement’s ability to combat cryptocurrency-based crime is also evolving. We’ve seen several examples of this throughout 2021, from the CFTC filing charges against several investment scams, to the FBI’s takedown of the prolific REvil ransomware strain, to OFAC’s sanctioning of Suex and Chatex,” the report said.

Tags
Blockchain
Analysis
Cybercrime
Crimes
Scams
Fraud
Malware
Dark Web
Dark Markets
Related Posts
SEC issues first ever charges over phoney ‘insider information’ on darknet
The U.S. Securities and Exchange Commission has announced charges against California resident James Roland Jones in the first-ever enforcement action from the commission to target securities fraud on the darknet. According to the March 18 complaint, Jones is accused of accessing a darknet-based insider trading forum in late 2016 to seek material non-public information, or MNPI, on which to trade securities. He was unsuccessful in obtaining any useful MNPI from the forum, but in the spring of 2017, Jones allegedly began selling insider stock tips himself under the false pretext he was privy to MNPI obtained both from the forum …
Regulation / March 19, 2021
Expert Warns: Don’t Trust Ransomware Groups Amid Pandemic
A cybersecurity expert explained why he is convinced that the promises made by ransomware groups amid the pandemic are irrelevant. Brett Callow — threat analyst at cybersecurity firm Emsisoft — told Cointelegraph that multiple ransomware groups recently made promises to halt their activity against medical organizations amid the coronavirus pandemic. Still, he believes that those promises are irrelevant: “The claims of a ceasefire made by ransomware groups are irrelevant [and] should be completely disregarded. Would you leave your front door unlocked simply because the local burglars had pinky-promised not to rob you? Probably not. The story of the frog and …
Blockchain / April 16, 2020
South Korea: Crypto Crimes Cost $2.28B Since July 2017
The South Korean Justice Ministry estimates that cryptocurrency-related crimes have caused 2.69 trillion won (about $2.28 billion) of financial damage between July 2017 and June 2019. According to a July 21 report by English-language local media The Korea Herald, the ministry claimed that 132 cryptocurrency-related criminals and fraudsters had been indicted and detained, with another 288 indicted without physical detention during the aforementioned time frame. The report states that, while Justice Minister Park Sang-kim has ordered stern measures against cryptocurrency criminals, a lack of clear regulations on cryptocurrency exchanges has led to an increase in the use of quasi-anonymous or …
Altcoin / July 21, 2019
Alleged CabbageTech Crypto Fraudster Indicted on Nine Counts
United States Attorney for the Eastern District of New York Richard P. Donoghue unsealed a nine-count indictment against Patrick McDonnell today, according to a press release from the Department of Justice (DoJ) on March 26. Following his arrest earlier today, McDonnell — the owner and operators of purported investment firm CabbageTech — was charged with nine counts of wire fraud in connection with an alleged plan to defraud cryptocurrency investors. Donoghue said in the press release: “As alleged, the defendant defrauded investors by making false promises and sending them fraudulent balance statements, hiding the fact that he was stealing their …
Blockchain / March 27, 2019
'Less sophisticated' malware is stealing millions: Chainalysis
Cryptojacking accounted for 73% of the total value received by malware related addresses between 2017 and 2021, according to a new malware report from blockchain analysis firm Chainalysis. Malware is used to conduct nefarious activity on a victim’s device such as a smartphone or PC after being downloaded without the victim’s knowledge. Malware-powered crime can be anything from information-stealing to denial-of-service (DDoS) attacks or ad fraud on a grand scale. The report excluded ransomware, which involves an initial use of hacks and malware to leverage ransom payments from vicitms in order to halt the attacks. Chainalysis stated: “While most tend …
Blockchain / Jan. 20, 2022