A mid-2023 crypto crime update: inflows to illicit entities drop 65% YoY, scammers net ~$3.3B less than H1 2022, and ransomware took $175.8M more than H1 2022
2023 so far has been a year of recovery for cryptocurrency after a chaotic 2022, with prices of digital assets like Bitcoin up over 80% on the year as of June 30.
Context & Ripple Effects
The update follows a 2022 period in which both legitimate and illicit crypto activity were falling, though illicit volumes had declined less sharply than legitimate volumes. That makes the mid-2023 drop meaningful, but not a standalone measure of reduced criminal demand.
Its importance is the divergence within crypto crime: broad illicit inflows and scam proceeds weakened while ransomware receipts rose. Subsequent coverage confirmed that ransomware payments reached a record in 2023, underscoring why aggregate illicit-volume figures can mask acute threats.
First-order effects
- Scammers and other illicit crypto recipients saw substantially less incoming value year over year in the first half of 2023, reducing proceeds available to those operations.
- Ransomware operators moved in the opposite direction, receiving $175.8 million more than in the prior-year period despite the broader decline in illicit inflows.
Second-order effects
- Crypto exchanges, investigators, and enterprise security teams cannot treat the aggregate decline as a uniform risk reduction; ransomware remains a distinct exposure requiring separate monitoring and response.
- The split between falling scam revenue and rising ransomware receipts shifts attention toward the criminal activities and payment routes that remain productive, rather than headline-level illicit-volume totals.
Third-order effects
- If this divergence persists, crypto-crime measurement will increasingly move from aggregate inflows toward category-specific indicators such as ransomware payments and laundering exits.
- Later evidence that illicit funds became concentrated among a small set of off-ramp services handling most illicit funds suggests enforcement and compliance pressure may increasingly focus on financial chokepoints rather than the whole on-chain market.
The trend: Crypto crime is becoming more uneven: broad illicit flows can fall while specialized, high-impact ransomware activity remains resilient or expands.