Cryptocurrency ransom payments drop amid record-high illicit transactions in 2022: reports

Ransomware payments in cryptocurrency saw a sharp drop in 2022 despite a record-high volume of illicit transactions, according to research firm Chainalysis, as the virtual asset sector continues to reel from a tumultuous year that saw several companies collapse.

Ransomware attackers extorted at least US$456.8 million in cryptocurrency from victims last year, a 40 per cent decline from US$765.6 million in 2021, Chainalysis said in a report published on Thursday.

The decline, though, does not suggest a drop in the number of attacks. Rather, it is because victim organisations are becoming less willing to pay attackers, the report said.

In 2022, 59 per cent of ransomware victims did not pay a ransom, up from only 24 per cent in 2019, according to Chainalysis, citing data from cybersecurity firm Coveware.

Reasons for the drop in ransom payments include disruptions such as the Russia-Ukraine war and Western law enforcement’s increased pressure on ransomware gangs, which led to fewer successful extortion attempts, Chainalysis said, citing Michael Phillips, chief claims officer of cyber insurance firm Resilience.

Paying ransoms has also become legally riskier, after the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued an advisory in September 2021 that warned against ransomware payments to sanctioned entities.