Ransomware payments hit a record $1.1 billion in 2023, marking the highest number measured for a single year and nearly twice as much as the year before. Despite a decrease in the percentage of ransomware victims paying ransoms, the total sum collected by ransomware gangs is growing as more cybercriminals are drawn to the lucrative industry and carry out more attacks. The record-breaking payments were driven by a spike in the number of attacks and hackers demanding larger sums from carefully chosen victims. The continued growth of the ransomware business underscores the need for further crackdowns on cryptocurrency crime and money laundering to prevent ransom payments from being liquidated.
Ransomware payments reached a record $1.1 billion in 2023, surpassing previous highs and reversing the decline seen in 2022. The resurgence of ransomware was attributed to escalating attacks against major institutions and critical infrastructure, with groups like Clop employing a "big game hunting" strategy to target large, deep-pocketed victims for substantial payments. Ransomware gangs are adapting to a decline in ransom payments by shifting towards targeting larger companies, and the laundering of ransom payments primarily involves mixing services, underground exchanges, and platforms without KYC requirements. Despite a decline in victims opting to pay, 2023 has been a profitable year for ransomware gangs, but efforts to discourage ransom payments may lead to a critical point where ransomware operations become financially unsustainable.
Stablecoins, such as Tether, have facilitated $40 billion in illicit cryptocurrency transactions since 2022, with 70% of crypto scams and 83% of payments to sanctioned countries involving stablecoins. Chainalysis found that stablecoins were used in 84% of payments to specifically sanctioned individuals and companies. The appeal of stablecoins for sanctions evasion lies in their stability and ability to circumvent restrictions on accessing the US dollar. Tether, the most popular stablecoin, has been singled out for its use in illegal gambling and scam operations, with scammers preferring it due to its stability and low fees. Despite Tether's ability to freeze criminal funds, the illicit use of stablecoins continues to outpace seizures, posing a significant challenge for law enforcement.
Following the collapse of Silicon Valley Bank, there was a surge in outflows from centralized exchanges (CEXs) to decentralized exchanges (DEXs), with users loading up on USD Coin (USDC) due to confidence in the stablecoin. Chainalysis noted that USDC was one of the top assets being moved to DEXs, with some crypto users betting that it would regain its peg. However, the surge in daily trading volumes for large DEXs was short-lived in both cases.
