Fraudulent transfers from Eastern Europe to illicit destinations account for the vast majority of monies routed to unlawful destinations in the region.
Following a recent study, it was shown that Eastern Europe continues to be a significant source of illicit activity in the cryptocurrency industry, both from victims of scams as well as from users who access darknet markets.
According to a report published on Sept. 1 by blockchain research firm Chainalysis, cryptocurrency addresses based in Eastern Europe have the second-highest exposure to criminal activities behind those based in Africa.
Eastern Europe, on the other hand, has a far larger overall crypto economy than both Africa and Latin America combined, according to the World Crypto Economy Report 2018. (which came in third.) Researchers found results that were similar to those seen the year before.
Over the period July 2020 to June 2021, the study looked at the unlawful share of bitcoin activity by region. Over the course of the investigation, it was discovered that crypto addresses and wallets based in Eastern Europe remitted $815 million to scammers and Ponzi schemes.
“As is the case with all regions, scams make up the biggest share of funds sent from Eastern Europe to illicit addresses — we can assume that most of this activity represents victims sending money to scammers.”
According to Chainalysis, cryptocurrency is transmitted to darknet markets in Eastern Europe at a higher rate than in other parts of the world. Hydra, a growing Russian-language darknet market that claims to be the world’s largest, is one of the most active markets on the internet.
When the data was broken down into a country-by-country breakdown, it was discovered that Ukraine was by far the most popular nation in the region, attracting more internet traffic to scam websites than any other country.
One scam in particular accounted for more than half of the total amount of money sent in the region at the time. Finiko, a Ponzi scheme established in Russia that went under in July 2021, promised high returns and issued its own cryptocurrency, the FNK token.
In total, the Finiko scheme received more than $1.5 billion in Bitcoin (BTC) in more than 800,000 distinct deposits between December 2019 and August 2021, according to the research.
There have also been reports of ransomware being related with addresses in Eastern Europe, with $46 million being paid to questionable wallets in the region.
This, according to the analytics business, can be linked to Russian hacker gangs, which, citing Evil Corp as an example, are responsible for “many of the most prolific ransomware strains,” which are “associated with cybercriminal groups either based in or affiliated with Russia.”
Cointelegraph claimed a year ago that Evil Corp had demanded a $10 million cryptocurrency ransom in order to restore access to Garmin’s navigation solutions after its network had been hijacked by a cyberattack.