In its 2022 Crypto Crime report, Chainalysis has revealed that 3.7% of whale addresses, defined as holding more than $1 million worth of crypto, are for criminal use.
A ‘whale’ is used to describe an individual or organization that holds a large amount of a particular cryptocurrency. Whales are typically associated with the ability to cause a significant impact on the market prices, either by buying or selling large amounts of an asset.
Institutions that hold large amounts of crypto also fall into these category, with examples that include:
- Pantera Capital
- Fortress Investment Group
- Falcon Global Capital
Chainalysis has identified 4,068 criminal whales holding over $25 billion worth of cryptocurrency.
In addition, the report says that most criminal whales received either a relatively small or extremely large share of their total balance from illicit addresses.
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SEE ALSO: NFTs Fast Becoming a Hotspot for Money Laundering, Says Latest Chainalysis Report
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Here is a further breakdown of some of the data about the amounts of funds received by whale addresses:
- 1,374 criminal whales received between 10% and 25% of their total balance from illicit addresses
- 1,361 criminal whales that received between 90% and 100% of their total balance from illicit addresses
- 1,333 criminal whales received between 25% and 90% of all funds from illicit addresses
according to the report:
“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.”
– Chainalysis 2022 Crypto Crime Report
Here is a breakdown from the report:
- Darknet markets – 37.7%
- Scam – 32.4%
- Stolen Fumds – 24.3%
- Fraud shop – 3.5%
- Ransomware – 1.9%
Finally, based on matching illicit transaction activity to timezones, the report estimates that UTC time zones 2, 3, and 4 contain the most criminal whales. Time zones 1-9 also have a relatively large number of illicit transactions.
“UTC time zones 2, 3, and 4 include much of Russia, including major population centers like Moscow and Saint Petersburg, which is especially interesting in the context of Russia’s outsized role in cryptocurrency-based crime.”
– Chainalysis 2022 Crypto Crime Report
Overall, the report reveals that criminal addresses received more than $14 billion in 2021 marking a whopping 79% increase compared to the $7.8 billion seen in 2020.
For Chainalysis, it only tracked private whale accounts that were receiving funds from illicit addresses, so the findings are not the entire picture of criminal whale activity because whale wallets can be present in other crypto services.
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RECOMMENDED READING: Crypto Crime Grew by 516% in 2021 Compared to 2020 – DeFi Contributed to 72%, Says Latest Chainalysis Report
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