Cryptocurrency-related crimes have been escalating globally as digital assets continue to gain traction among investors and institutions, a recent study by blockchain analytics firm Chainalysis has revealed.
Shafnaa Shamsuddin, group chief financial officer of a Dubai-based outdoor advertising company, shared her experience of falling victim to fraudulent activities in the cryptocurrency mining sector. In 2023, Ms. Shamsuddin invested in 15 mining machines but struggled to find a reliable host for her equipment in the UAE.
“He promised to help build a legal hosting facility for the mining machines. He said there was a facility available and I transferred Dh50,000 [$13,613] as a three-month advance to run my machines. However, for months, I did not hear from him on when the machines would be up and running. Later, he refused to return my money or set up the facility, but I managed to retrieve the machines,” she said.
Despite such challenges, cryptocurrency’s rising popularity continues to lure investors, often enticing cybercriminals. According to the Chainalysis report, the value of stolen cryptocurrencies in 2024 reached approximately $2.2 billion, with over 60% of that attributed to North Korea-linked attacks. This marks a 21% increase from 2023, making 2024 the third-highest year for stolen cryptocurrency values, following records set in 2021 and 2022.
The number of reported crypto hacks also rose for the second consecutive year, with 302 incidents in 2024 compared to 282 in 2023, Chainalysis noted.
While acknowledging the risks, Ms. Shamsuddin advised caution. “Only put money in cryptos that you can afford to lose. It can be very addictive, and you may swipe your credit card or take a loan to buy mining machines. But I wouldn’t discourage anyone from trading or mining cryptos because it is a very good way to learn the future of transactions,” she said.
Despite the increase in cybercrime, experts highlight that malicious activity constitutes only a small portion of total cryptocurrency transactions. “It’s important to keep in mind that malicious activity accounts for just a tiny fraction of the overall on-chain crypto activity,” said Arushi Goel, head of policy for the Middle East and Africa at Chainalysis.
Meanwhile, Bitcoin, the world’s largest cryptocurrency, has experienced a surge, surpassing $100,000 in early December following pro-crypto sentiment from US President-elect Donald Trump. The cryptocurrency reached an all-time high of $106,500 before retreating after US Federal Reserve Chairman Jerome Powell expressed hesitancy about holding Bitcoin in a strategic reserve.
Despite the volatility, the cryptocurrency market’s total capitalization now exceeds $3.5 trillion, with Bitcoin alone accounting for nearly $2 trillion.
Anna Zeitlin, a partner at Addleshaw Goddard law firm, noted that while the Middle East and North Africa (MENA) region has seen increased crypto activity, the number of crypto-related crimes in the region has not risen significantly. However, ransomware attacks in the space have steadily grown.
“The general downward trend [in crime] has been spearheaded by crypto companies improving their security infrastructures,” Ms. Zeitlin said. “For crypto companies to survive and thrive in the ever-competitive landscape, they need to take security seriously.”
Globally, the growth of crypto-tracking firms has aided law enforcement in tracing illicit funds and apprehending criminals. These firms, often employing former hackers, are expected to expand operations in the MENA region as the industry grows.
Ms. Zeitlin added, “The excitement surrounding deregulation under Mr. Trump’s administration has spread to our region, and it will likely drive significant growth in the value of certain cryptocurrencies and the broader industry.”