Crypto criminals have shifted their focus away from Bitcoin to other cryptocurrencies, according to a report released Wednesday by blockchain analytics company TRM Labs. Despite the crypto market downturn in recent years, scammers and hackers have still managed to extract at least $7.8 billion from victims in 2022 through Ponzi schemes. Additionally, over $9 billion in crypto has been sent to addresses associated with various frauds and scams, with USDT based on the Tron blockchain being the most popular.
DeFi exploits have also been lucrative for attackers, with $3.7 billion stolen from cross-chain bridges. Darknet marketplaces selling illegal drugs have also seen a significant influx of crypto, with $1.5 billion being sent to these sites. To avoid detection, criminals have been using chain hopping, which is the process of transferring money from one blockchain to another. This has caused Bitcoin’s share in such crimes to drop from 97% in 2016 to 19% in 2022.
In 2016, two-thirds of crypto hack volume was on Bitcoin; in 2022, it accounted for just under 3%, with Ethereum (68%) and Binance Smart Chain (19%) dominating the field, the report stated. Additionally, Bitcoin is no longer the preferred coin for terrorism financing, with USDT on the Tron blockchain now dominating the market.
Russian darknet marketplaces still prefer Bitcoin as payment for narcotics and other illegal goods, accounting for 80% of the market. Western marketplaces often accept Monero as well, but their share in the overall darknet economy is much smaller. Websites offering pornographic photos and videos of children (known as child sexual abuse materials, or CSAM) received no less than $3.32 million in 2022, however, more than two thirds of those funds went not to actual CSAM vendors but to scammers.