The landscape of cryptocurrency crime experienced a notable shift in 2023, with illicit transactions involving digital currencies seeing a significant reduction compared to the previous year. According to a comprehensive report by blockchain intelligence firm Chainalysis, the total value of cryptocurrency received by illicit addresses in 2023 amounted to approximately $24 billion. This figure represents a decline of nearly 40% from the $39.6 billion recorded in 2022, signaling a potential turning point in the fight against digital currency-related criminal activities.
Changing patterns in illicit transactions
The Chainalysis report reveals that, while the total amount of illicit crypto transactions decreased, the nature of these transactions has evolved. Notably, stablecoins have overtaken Bitcoin as the cryptocurrency of choice for illegal transactions. Since 2022, stablecoins have accounted for about two-thirds of the illicit transaction volume, a shift from the previous dominance of Bitcoin in this sector from 2018 to 2021. This change highlights the evolving tactics of those engaging in crypto crime as they adapt to the changing landscape of the cryptocurrency market.
The report also sheds light on the complexities involved in identifying and categorizing illicit transactions. A significant portion of the $14.9 billion in transactions with sanctioned entities, which accounted for 61.5% of the illicit volume in 2023, involved ordinary crypto users in sanctioned jurisdictions. This includes users of the Russia-based crypto exchange Garantex, which faced sanctions from the U.S. and U.K. This aspect of the report underscores the challenges faced by regulatory and law enforcement bodies in distinguishing between legitimate and illicit crypto activities.
A nuanced view of crypto-related crimes
The Chainalysis report also indicates a nuanced shift in the types of crypto-related crimes. While overall illicit activities have decreased, specific areas such as ransomware and dark net activities have seen an increase. In contrast, crypto scams and hacks witnessed substantial declines, dropping by 29.2% and 54.3%, respectively, last year. This data suggests that while the total volume of crypto crime is decreasing, the focus of criminal activities within the crypto space is shifting, requiring continuous vigilance and adaptation from regulatory authorities.
Overall, the 2023 Chainalysis report provides a detailed and nuanced view of the state of crypto crime. The decrease in overall illicit activities and the evolving patterns of these crimes highlight the successes and ongoing challenges in regulating the cryptocurrency market. As the landscape of digital currencies continues to evolve, it becomes increasingly important for regulatory bodies and law enforcement agencies to stay ahead of the curve in combating crypto crime.
Source: https://www.cryptopolitan.com/chainalysis-40-drop-illicit-transaction-2023/