Illicit Activity Market Revenue Decline In 2023
In 2023, there was a significant decrease in the value received in cryptocurrency addresses used for illicit activities, according to the 2024 Crypto Crime Report released by American blockchain analysis firm Chainalysis. The total amount dropped to $24.2 billion from the previous year’s estimate of $39.6 billion. Additionally, the share of all crypto transaction volume associated with illicit activity decreased from 0.42% in 2022 to 0.34% in 2023.
The report also highlights a shift in the type of assets involved in crypto-related crime activities. Bitcoin is no longer the most commonly used asset for illicit transactions. Instead, stablecoins have become more popular, possibly due to their overall growth in the crypto market.
Trends That Defined Crypto-Related Crime In 2023
Scamming revenues have been declining globally since 2021, according to Chainalysis on-chain metrics. Romance scams, particularly ‘pig butchering,’ are among the most common tactics used by scammers. However, overall scamming has decreased due to broader market dynamics.
Crypto hacking revenue also saw a significant decline in 2023, mainly driven by a drop-off in DeFi hacking incidents. However, ransomware and darknet markets experienced an increase in revenue during the same period.
Transactions with sanctioned-related entities and jurisdictions accounted for a large portion of illicit activity, totaling $14.9 billion in transaction volume. These transactions often involve cryptocurrency services that operate outside of jurisdictions where U.S. sanctions are enforced.
Hot Take: Positive Trends and Challenges Ahead
The crypto market faced challenges at the start of 2023 but managed to recover and end the year on a positive note. The decline in crypto scamming and crypto-related illicit activity compared to the previous year is a promising trend. However, there are still areas of concern, such as the rise in ransomware and darknet market revenue. Moving forward, it will be crucial for regulators and industry players to address these challenges and ensure the continued growth and security of the crypto market.
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