- Illicit Crypto Transactions in 2023: The total amount of cryptocurrency received by illicit addresses in 2023 amounted to over $24 billion, constituting approximately 0.34% of all transaction volumes.
- Comparative Analysis with 2022: This figure represents a nearly 40% decrease from the total in 2022, with a provisional amount of $24.2 billion that is expected to rise as more illicit addresses are identified.
A Decrease in Crypto Crime
The Chainalysis report underscores a significant reduction in the overall scale of illicit cryptocurrency activities compared to 2022. Initially, 2022’s illicit transaction volume was reported at $20.6 billion but has since been revised to $39.6 billion. The decrease in 2023 can be attributed to various factors, including heightened security measures and enhanced regulatory oversight within the crypto ecosystem.
The Role of Sanctioned Entities
A notable aspect of the 2023 report is the impact of transactions involving sanctioned entities, accounting for approximately $14.9 billion, or 61.5% of the year’s total illicit volume. This includes transactions from ordinary crypto users residing in sanctioned jurisdictions, notably highlighting the complexity of categorizing and tracking illicit activities. For instance, users of the Russia-based crypto exchange Garantex, sanctioned in both the U.S. and U.K., are not necessarily involved in criminal activities like money laundering or ransomware.
Shifting Trends in Crypto Crime
The report also sheds light on the changing preferences of criminals in terms of cryptocurrency usage. While Bitcoin dominated illicit transactions from 2018-2021, the trend shifted towards stablecoins in 2022 and continued through 2023. Stablecoins accounted for the majority of illicit transaction volumes in these years, taking over Bitcoin’s previous dominance.
Varied Crypto Crime Patterns
Chainalysis’ research reveals a mixed pattern in different types of crypto crimes. There was a notable decrease in crypto scams and hacks, down by 29.2% and 54.3% respectively. Contrarily, there was an increase in ransomware and dark net activities. This evolving landscape poses continuous challenges for regulatory and law enforcement bodies in monitoring and combating crypto-related crimes.
In conclusion, the Chainalysis report provides a comprehensive overview of the declining trend in crypto crimes in 2023, highlighting the evolving and complex nature of illicit activities within the cryptocurrency domain.