Illicit Crypto Transaction Volume Drops in 2023, Says Chainalysis
According to a report by blockchain analysis firm Chainalysis, the volume of illicit transactions in the cryptocurrency space saw a significant decrease in 2023. This marks a shift from the rising trend observed between 2020 and 2022.
Last year, illicit addresses received approximately $24.2 billion in cryptocurrency value. This is a notable decline compared to the $9.4 billion received in 2020, which then rose to $23.2 billion in 2021 and $39.6 billion in 2022.
Chainalysis also notes that the share of all crypto transaction volume associated with illicit activity decreased from 0.42% in 2022 to 0.34% in 2023. However, these figures only account for known illicit addresses, and the actual volume may be higher when accounting for unknown addresses.
The report highlights that revenue from crypto scams and hacking dropped by 29.2% and 54.3%, respectively. On the other hand, inflows to ransomware and darknet markets increased following a decline in 2022. Transactions involving sanctioned entities accounted for the majority of illicit activities in 2023, representing $14.9 billion or 61.5% of all measured illicit transaction volume.
Hot Take: Decline in Illicit Crypto Transactions Reflects Improved Security Measures
The decrease in illicit crypto transaction volume observed in 2023 is a positive development for the cryptocurrency industry as it indicates an improvement in security measures and efforts to combat illegal activities. The decline can be attributed to various factors such as increased regulatory oversight, advancements in blockchain analytics technology, and enhanced security protocols implemented by cryptocurrency exchanges and wallets.
While this decrease is encouraging, it is important to remain vigilant and continue implementing robust security measures to prevent illicit activities in the crypto space. Collaboration between industry stakeholders, regulatory authorities, and law enforcement agencies will be crucial in maintaining this positive trajectory and ensuring the long-term integrity of the cryptocurrency ecosystem.
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