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Chainalysis: 4% of crypto whales are criminals, and they hold $25B among them


According to Chainalysis, 4,068 illegal whales (approximately 4% of all whales) are hoarding more than $25 billion in cryptocurrencies.

Criminal whales, according to the blockchain analytics firm, are any private wallet holding more than $1 million in cryptocurrency, with more than 10% of the cash coming from illicit addresses linked to scams, fraud, and malware.

The information comes from the “Crypto Crime Report’s” “Criminal Balances” section, which looks at criminal activities on the blockchain in 2021 and early 2022. Ransomware, malware, darknet markets, and nonfungible token-related criminality are all covered in the comprehensive research.

“Overall, Chainalysis has discovered 4,068 criminal whales that are in possession of almost $25 billion in cryptocurrencies. “Criminal whales account for 3.7% of all cryptocurrency whales, or private wallets holding more than $1 million in cryptocurrency,” according to the survey.

According to the data, 1,374 whales obtained between 10% and 25% of their balance from shady sources, while 1,361 whales earned between 90% and 100%. There were 1,333 criminal whales with illicit financial balances of 25% to 90%.

Percentage of whale balance via illicit addresses: Chainalysis

“Stolen monies account for the majority of criminal balances. However, darknet markets are the leading source of illicit funds supplied to criminal whales. With scams coming in second and stolen funds coming in third,” according to the report.

FinCEN reported an increase in the number of ransomware payments in 2021

Illegal transaction activity

According to the research, criminal addresses received more than $14 billion in unlawful transaction activity in 2021. A massive 79% rise over the $7.8 million reported in 2020.

Value received via type of crypto crime: Chainalysis

Scamming accounted for the lion’s part of the $14 billion number last year. Accounting for $7.8 billion, up 82% year over year. Rug pulls by Decentralized Finance (DeFi) were singled out as a major source of fraud. With a total value of $2.8 billion:

“It’s worth noting that one fraudulent centralised exchange, Thodex, whose CEO vanished soon after the exchange suspended users’ ability to withdraw assets, is responsible for nearly 90% of the total value lost to rug pulls in 2021.”

Theft soared by 516% to $3.2 billion in illegal transactions. With the DeFi sector once again being a source of concern.

On the plus side, according to Chainalysis, the overall transaction volume in US dollars in 2021 will be roughly $15.8 trillion. With unlawful addresses accounting for only 0.15% of that, down from 0.34% the year before.

“Crime is vanishing from the cryptocurrency ecosystem. The ability of law enforcement to combat cryptocurrency-based criminality is improving. Throughout 2021, we’ve seen various examples of this, from the CFTC pressing charges against several investment frauds to the FBI’s takedown of the widespread REvil ransomware strain to OFAC’s sanctions of Suex and Chatex,” according to the paper.

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