According to ChainAnalysis analytics firm, more than 4,000 criminal-activity-related addresses currently hold over $25 million worth of cryptocurrency. Criminal whales represent almost 4% of all crypto whales. The aforementioned addresses are somehow related to such activities as money laundering, drug dealing and terrorism.
In 2021, the illegal activity in the cryptocurrency industry has increased gradually as more private funds started flowing into the industry. But with the increased activity of criminal elements in crypto, law enforcement has discovered a new way of seizing digital assets from criminals.
According to the analytics firm, in 2021, IRS-CI seized over $3.5 billion worth of cryptocurrency from wallets that were marked as related to criminal activities. But at the same time, regulators are not disclosing the technical methods of seizing such assets.
The most recent and, most likely the biggest, one-time exemption of digital assets was related to a pair of criminals that were either conducted or related to the Bitfinex hack in 2016. Access to private keys was obtained through cloud storage services that hackers used for storing quite sensitive data.
Most widespread type of criminal activity
According to ChainAnalysis, the majority of "criminal wallets" are related to stolen funds and darknet markets. In 2021, hackers and scammers were able to steal at least $8 billion from gullible or inexperienced users that just entered the industry.
Alex DovbnyaAt the end of 2021, the volume of funds concentrated in criminal wallets has increased after a series of DeFi hacks. Numerous platforms and users became victim to various exploits found in smart contracts.
According to the age of coins on illicit whales' addresses in 2021, they tend to either diversify their holdings or move funds to fiat as soon as possible. It is likely tied to the fact that law enforcement has found new ways of seizing digital funds.
Yuri Molchan
Tomiwabold Olajide
Vladislav Sopov
Dan Burgin