The Amount of Crypto Stolen Through Scams Decreased in 2023, Chainalysis Report Shows
A recent report by Chainalysis reveals that the amount of cryptocurrency stolen through scams in 2023 was significantly lower than in the previous year. The blockchain analysis firm found that illicit revenue decreased by over 54% overall. Stolen cryptocurrency accounted for 0.34% of total on-chain transactions in 2023, totaling $24.2 billion, compared to 0.42% ($39.6 billion) in 2022. This decrease can be attributed to a decline in funds sent to “illicit” addresses and stolen funds from hacks.
Reason for Lower Amount: Exclusion of FTX Creditor Claims
Chainalysis noted that the higher amount reported for 2022 was due to the inclusion of $8.7 billion in FTX creditor claims. However, the firm had previously decided to hold off on including these transaction volumes until legal processes were concluded. With the recent guilty verdict against FTX founder Sam Bankman-Fried, Chainalysis included the FTX transactions in their calculations.
Notable Incidents and Criminal Activities
Throughout the year, several notable incidents and criminal activities occurred within the crypto space. A credit market on the Optimism Network was hacked, resulting in cybercriminals stealing 4,323.6 ETH (approximately $7 million). Canadian authorities also reported that citizens lost over $22.5 million to cryptocurrency scams.
In November, the U.S. Department of Justice charged three individuals with laundering over $10 million in cryptocurrency, potentially facing a 30-year prison sentence if convicted. Additionally, Chainalysis collaborated with the DOJ to freeze $225 million in USDT linked to human trafficking.
Shift from Bitcoin to Stablecoins
Bitcoin, which was previously the preferred cryptocurrency among cybercriminals due to its liquidity, has been dethroned by stablecoins. Chainalysis revealed that stablecoins now account for the majority of illicit transaction volume. However, this shift does not apply to all forms of cryptocurrency-based crime.
Increase in Criminal Activity and Senator Elizabeth Warren’s Concerns
While the amount of stolen cryptocurrency decreased, criminal activities such as ransomware attacks and darknet market operations saw significant revenue increases compared to the previous year. Massachusetts Senator Elizabeth Warren, a vocal critic of cryptocurrency, called for stricter regulation to combat illegal activities involving digital currencies. She expressed concerns about cryptocurrency lobbyists undermining efforts to prevent terrorist financing.
UNODC Reports Rise in Money Laundering through Online Casinos
The United Nations Office on Drugs and Crime (UNODC) recently reported an increase in money laundering using online casinos in East and Southeast Asia. The rise of transnational organized crime in the region has been driven by advancements in technology.
Hot Take: Decrease in Crypto Scams Reflects Improved Security Measures
The decline in crypto scams and stolen funds is a positive development that reflects improved security measures within the crypto industry. The increased focus on stablecoins by cybercriminals highlights the need for continued vigilance and regulation. It is crucial for regulators, law enforcement agencies, and industry players to work together to combat criminal activities while ensuring a safe and secure environment for crypto users.
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