Crypto Payments to Ransomware Hackers Plummet: Regs and AML Win the War

• Cryptocurrency payments to ransomware hackers totaled a mere $16 million in 2022, compared to nearly $74 million USD in 2021.
• Analysis of on-chain activity shows that crypto services with a high money laundering risk score are seeing a drop in popularity.
• Crypto exchanges and services that manage to keep “dirty” crypto out have been further tightening anti-money laundering policies, effectively scaring away criminal actors.

The prevalence of ransomware attacks has increased in recent years, with the notorious Conti ransomware gang terrorizing U.S. hospitals during the COVID-19 pandemic. Despite this, blockchain intelligence firm Crystal Blockchain has reported that cryptocurrency payments to ransomware hackers totaled a mere $16 million in 2022, compared to nearly $74 million USD in 2021.

Nick Smart, Crystal’s director of blockchain intelligence, noted that it may be too early to conclude that ransomware attacks are in permanent decline. He further explained that due to the way ransoms generally work, it’s not possible to tell what happened now as many companies don’t disclose payment information publicly.

In order to combat the rise of cybercrime, an analysis of on-chain activity has been conducted, which has revealed that crypto services with a high money laundering risk score – meaning they receive funds from scams and cybercrime more often than others – are seeing a drop in popularity. This is likely due to increased regulation, registration and client expectations.

In addition, to keep “dirty” crypto out, crypto exchanges and services have been further tightening anti-money laundering policies. This has effectively scared away criminal actors, with the volume of funds sent to low-risk exchanges from scams having fallen by 24% in 2022 compared to 2021.

Overall, the combination of heightened regulation and anti-money laundering policies, as well as a decrease in the number of services willing to accept funds from cybercrime, appears to have had a significant impact on the amount of cryptocurrency payments to ransomware hackers. This could be a sign that the world is slowly winning the battle against cyber criminals.