Is Cryptocurrency’s Crash Causing Headaches for Ransomware Gangs?

As the value of Bitcoin plunged in the last eight months, some security firms have observed an impact on ransomware activity.

Since the beginning of the year, for example, ransomware attacks have dropped by about a quarter, according to cybersecurity firm Arctic Wolf. In another measure of the disruption, most of the fly-by-night cryptocurrency exchanges serving to launder ransoms have stopped advertising their services, suggesting that as cash-outs surged — essentially, creating a bank run — they could not satisfy demand, according to a new blog post from cyber-threat intelligence firm Cybersixgill.

And according to new data released this week from the Identity Theft Resource Center, ransomware attacks leading to data breaches fell 20% in the second quarter of 2022 compared with the first quarter of this year, and have declined quarter over quarter.

Most major ransomware groups cash out cryptocurrency quickly, but smaller players are more likely to hold onto their assets, leading to a panicked response, says Dov Lerner, security research lead at Cybersixgill.

“I don’t know how much reserves Binance or Coinbase might have, but these Dark Web exchanges, they certainly don’t have millions of dollars in reserves,” he says. “If everyone is dumping cryptocurrency for dollars, they can’t keep up.”

The volatility in cryptocurrency markets has led to massive disruption among the nascent companies attempting to find their place in what had been a burgeoning marketplace. This week, cryptocurrency lending firm Celsius Network filed for Chapter 11 bankruptcy after locking out customers from making withdrawals

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