Crypto Criminals Shift Focus to Centralized Exchanges, Chainalysis Report Reveals

Crypto criminals are increasingly targeting centralized exchanges, having made off with more than $1.5 billion in the first half of the year, according to a mid-year report by blockchain analysis firm Chainalysis. 

It marks a significant shift after four years of heightened focus on decentralized platforms. The report attributes this change to the growing sophistication of attackers, who are now employing advanced social engineering tactics. 

Chainalysis highlighted that some attackers, including those linked to North Korea, have even gone as far as applying for IT jobs at targeted companies. 

That strategy has enabled them to penetrate centralized exchanges, which, despite their more mature and robust security measures, offer larger potential payoffs.

The report noted an 84% year-on-year increase in the value of stolen crypto, reaching $1.58 billion. However, this figure follows a 50% year-on-year decline in stolen crypto in the same period last year, making the current surge appear more pronounced. 

Although the number of hacking incidents has only increased slightly by 2.76% year-on-year, the value stolen per incident has risen sharply, up 79% from the year prior, underscoring the higher value targets now being pursued by criminals.

Ransomware remains a growing threat, with Chainalysis reporting that total ransoms paid this year have reached $459.8 million, up from $449.1 million in the same period last year. 

The report suggests a possible link between the rise in ransomware activity and the increase in stolen funds, noting that organized groups, including those connected to North Korea, are behind some of the largest heists. 

These groups use sophisticated social engineering techniques to breach crypto businesses and launder the stolen assets before authorities can intervene.

Despite the rise in organized crime, the report also highlights a positive trend in the crypto sector. 

The growth of legitimate transactions on blockchains is outpacing the increase in illicit activity. Chainalysis reported a 19.6% decline in aggregate illicit transactions, from $20.9 billion to $16.7 billion, as the use of crypt continues to move toward mainstream adoption.

“It is highly encouraging to see that criminal activity continues to become an ever-shrinking share of the crypto ecosystem,” said Eric Jardine, Cybercrimes research lead at Chainalysis. “The growth of legitimate activity outpacing that of illicit activity on-chain demonstrates the continued transition of cryptocurrencies to the mainstream.”