4% of all crypto whales are criminals, holding more than $25B- Report

  • Roughly 4 percent of all crypto whales are criminals hodling a collective $25 billion, a recent Chainlysis report has unveiled.
  • Illicit addresses in 2021 accounted for just 0.15 percent of the year’s total transaction volume, down from 0.34 percent a year before.

Roughly 4,068 cryptocurrency whales, or 3.7 percent of all crypto whales, are criminals, according to a recent report by Chainalysis. The blockchain analytics firm further reports that these criminals collectively hodl over $25 billion.

A criminal whale, per this report, is a private wallet holding over $1 million worth of crypto, where more than 10 percent of its funds have originated from addresses tied to illicit activities like scams, fraud, and malware. Information about these criminal whales is present in the “Criminal Balances” section of the Chainalysis Crypto Crime Report of 2021-early 2022. The publication also covers crimes such as malware, ransomware, darknet markets, and NFT related crime.

Criminals and crypto in 2021

Of the above criminal whales, 1,361 had received between 90-100 percent of their crypto balances from nefarious sources. 1,374 had 10-25 percent of their balances from illicit addresses, while 1,333 had 25-90 percent in illicit funds.

“Whereas stolen funds dominate overall criminal balances, darknet markets are the biggest source of illicit funds sent to criminal whales, followed by scams second and stolen funds third,” the report read.

Additionally, Chainalysis highlights that criminal addresses received over $14 billion in 2021. This marks a whopping 79 percent increase compared to $7.8 million in 2020. Most of this $14 billion came from scamming, which accounted for $7.8 billion, an 82 percent increase year on year. Decentralized finance (DeFi) rug pulls brought in the most for scamming, at $2.8 billion, while the case of Thodex took up 90 percent of all crypto lost in rug pulls:

We should note that roughly 90% of the total value lost to rug pulls in 2021 can be attributed to one fraudulent centralized exchange, Thodex, whose CEO disappeared soon after the exchange halted users’ ability to withdraw funds.

Further notes

Lastly, theft cases rose by 516 percent, taking up $3.2 billion worth of illicit transactions. Here, the DeFi sector was once again, a major point of concern.

On the brighter side, Chainlysis noted that illicit addresses in 2021 accounted for just 0.15 percent of the year’s total transaction volume ($15.8 trillion). This is a marked drop from 0.34 percent in 2020. The report further notes;

Crime is becoming a smaller and smaller part of the cryptocurrency ecosystem. Law enforcement’s ability to combat cryptocurrency-based crime is also evolving. We’ve seen several examples of this throughout 2021, from the CFTC filing charges against several investment scams to the FBI’s takedown of the prolific REvil ransomware strain to OFAC’s sanctioning of Suex and Chatex,

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