The report defines criminal whales as private wallets that hold more than $1 million worth of crypto, with more than 10% of their balances coming from illicit addresses.
Chainalysis data shows that 4,068 criminal whales (roughly 4% of all whales) are hodling more than $25 billion worth of cryptocurrency among them.
The blockchain analytics firm defines criminal whales as any private wallet that holds more than $1 million worth of crypto with over 10% of the funds received from illicit addresses tied to activity such as scams, fraud and malware.
The data is from the “Criminal Balances” section of the “Crypto Crime Report,” which explores criminal activity on the blockchain from 2021 and early 2022. The wide-ranging report also covers topics such as ransomware, malware, darknet markets and nonfungible token-related crime.
“Overall, Chainalysis has identified 4,068 criminal whales holding over $25 billion worth of cryptocurrency. Criminal whales represent 3.7% of all cryptocurrency whales — that is, private wallets holding over $1 million worth of cryptocurrency,” the report reads.
The data shows that 1,374 whales have received between 10% and 25% of their balance from nefarious sources, while 1,361 had between 90% and 100%. Those with balances between 25% and 90% of illicit funds totaled 1,333 criminal whales.
“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,” the report reads.
Related: Chainalysis report finds most NFT wash traders unprofitable
Illicit transaction activity
In terms of illicit transaction activity, the report reveals that criminal addresses received more than $14 billion in 2021, marking a whopping 79% increase compared to the $7.8 million seen in 2020.
The lion’s share of that $14-billion figure last year was attributed to scamming, which increased by 82% year-over-year to account for $7.8 billion. Decentralized Finance (DeFi) rug pulls, in particular, were highlighted as a key source of scamming at $2.8 billion:
“We should note that roughly 90% of the total value lost to rug pulls in 2021 can be attributed to one fraudulent centralized exchange, Thodex, whose CEO disappeared soon after the exchange halted users’ ability to withdraw funds.”
Theft also increased by 516% to account for $3.2 billion worth of illicit transaction activity, with the DeFi sector once again being an area of concern.
On the positive side, Chainalysis pointed out that all transaction volume in United States dollar in 2021 totaled around $15.8 trillion, with illicit addresses accounting for a mere 0.15% of that figure, down from 0.34% the year prior.
“Crime is becoming a smaller and smaller part of the cryptocurrency ecosystem. Law enforcement’s ability to combat cryptocurrency-based crime is also evolving. We’ve seen several examples of this throughout 2021, from the CFTC filing charges against several investment scams to the FBI’s takedown of the prolific REvil ransomware strain to OFAC’s sanctioning of Suex and Chatex,” the report said.
