Chainalysis Study Shows ‘Criminal Whales’ Hold $25B in Digital Assets, Entities Represent 3.7% of All Crypto Whales

4% of crypto whales are criminals and they have B between them: Chainalysis

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 4068 criminal whales (roughly 4% of all whales) are hodling more than $25 billion worth of cryptocurrency between 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 that explores criminal activity on the blockchain over 2021 and early 2022. The wide-ranging report also covers topics such as Ransomware, Malware, Darknet markets and NFT 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 showed that 1,374 whales had 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.

*Percentage of whale balance via illicit addresses: Chainalysis*

“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 read.

Illicit transaction activity

In terms of illicit transaction activity, the report revealed that criminal addresses had received more than $14 billion in 2021, marking a whopping 79% increase compared to the $7.8 million seen in 2020.

*Value recieved via type of crypto crime: Chainalysis*

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 USD value 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.

Criminal Whales