Illicit Cryptocurrency Addresses Received $24.2 Billion in 2023, Says Chainalysis
A recent research report by blockchain analytics firm Chainalysis reveals that illicit cryptocurrency addresses received a total of $24.2 billion in 2023, marking a significant decrease from the estimated $39.6 billion in 2022.
Shift in the Landscape of Crypto Crime
The report highlights a notable shift in the types of assets involved in crypto crime. While Bitcoin (BTC) previously dominated, stablecoins now constitute the majority of illicit transaction volume. This change aligns with the broader trend of stablecoins gaining prominence in legitimate crypto activities.
Predominance of BTC in Certain Illicit Activities
Although stablecoins have become more prevalent, certain forms of illicit activities such as darknet market sales and ransomware extortion still predominantly involve Bitcoin (BTC).
Contribution of Sanctioned Entities and Jurisdictions
In 2023, sanctioned entities and jurisdictions contributed a substantial $14.9 billion to the overall illicit transaction volume, accounting for 61.5% of the total measured throughout the year. This significant figure is primarily fueled by crypto services facing sanctions from the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) or operating in sanctioned regions where U.S. sanctions lack enforcement.
Serious Sanctions Risk for Crypto Platforms
The report highlights the risks associated with exposure to Russia-based crypto exchange Garantex, which persists in its operations due to the absence of U.S. sanctions enforcement in Russia. While not all transaction volume from Garantex is linked to ransomware and money laundering, it poses a serious sanctions risk for crypto platforms subject to U.S. or U.K. jurisdiction.
Hot Take: Decrease in Illicit Crypto Activity Reflects Growing Legitimacy
The decrease in illicit cryptocurrency activity, as reported by Chainalysis, signifies a positive shift in the crypto industry towards greater legitimacy. The rise of stablecoins and the decline in illicit Bitcoin transactions indicate that cryptocurrencies are increasingly being used for legal and legitimate purposes. However, it is crucial to address the challenges posed by sanctioned entities and jurisdictions to ensure a safe and regulated crypto ecosystem.
By
By
By
By