Phishing scammers employing crypto drainers have significantly altered their strategy in 2023, diverting the majority of stolen funds into decentralized finance (DeFi) protocols rather than centralized exchanges. This marks a notable shift from 2020, when centralized exchanges were the primary destination for illicit funds.

Key Findings from Chainalysis Data

Data from blockchain intelligence firm Chainalysis reveals that nearly 75% of funds stolen via crypto drainers in 2023 were funneled into DeFi protocols. This is a stark contrast to 2020, when over 90% of stolen funds ended up in centralized exchanges. The firm also noted that some drainers are utilizing gambling services, though this is on a much smaller scale.

Quarterly Growth and Comparison to Ransomware

Chainalysis highlighted that the quarterly growth rate of value stolen by crypto drainers has surpassed the value stolen by ransomware, a category previously noted for its rapid growth. The real scale of phishing activity remains unclear due to the difficulty in tracking the total amounts stolen, as many crypto drainer scams go unreported.

Decline in Ransomware Payments

Interestingly, 2023 saw a 46% decrease in ransomware attack payments, attributed to a saturated ransomware market and lower barriers to entry. Chainalysis credits this decline to enhanced cyber resilience among organizations and a better understanding of the threats they face.

The shift from centralized exchanges to DeFi protocols for laundering stolen crypto funds signifies a significant change in cybercriminal strategies. As the landscape of crypto crime evolves, both users and organizations must stay vigilant and adapt to new threats to ensure the security of their assets.