Crypto Crime Falls in 2023: Chainalysis Report
According to blockchain analytics provider Chainalysis, crypto-related crime decreased in 2023. While scamming and stolen funds saw a decline, there was an increase in ransomware attacks. The findings were released as part of Chainalysis’ 2024 Crypto Crime Trends report.
The report revealed a significant drop in the value received by illicit cryptocurrency addresses in 2023, totaling $24.2 billion, down 39% from the previous year. Illicit activity accounted for 0.34% of all crypto transaction volume in 2023, a decrease of 20% compared to 2022.
Stablecoins now make up the majority of illicit crypto transaction volume, with Bitcoin still being predominantly used in crimes like ransomware. Tether was identified as playing a significant role in Southeast Asia’s crypto crime wave.
However, Chainalysis noted that these figures are “lower-bound estimates” and expect them to increase as more illicit addresses are identified and their historic activity is incorporated into the estimates.
Decline in Scamming and Hacking Revenues
Crypto scamming and hacking revenues saw a significant decline in 2023, dropping by 29.2% and 54.3%, respectively. This decline aligns with lower crypto prices and market stagnation during the consolidation phase.
The drop in stolen funds is mainly attributed to a decrease in DeFi hacking incidents, indicating that DeFi protocols may be improving their security practices.
Ransomware Revenues Increase
On the other hand, ransomware attacks and darknet market crypto revenues grew in 2023, suggesting that criminals have adapted to cybersecurity improvements. Additionally, many crypto scammers have adopted romance scam tactics to make their scams more difficult to uncover.
Sanctions-related transactions accounted for $14.9 billion or 61.5% of all illicit crypto volume in 2023. This is driven by services in sanctioned jurisdictions that continue to operate, particularly in countries like Russia that do not enforce US sanctions.
Law enforcement agencies worldwide are stepping up their efforts to combat crypto crimes, as highlighted in a recent report.
Hot Take: Positive Trends in Crypto Crime
The 2024 Crypto Crime Trends report by Chainalysis indicates positive trends in the crypto industry. The decline in illicit activity and stolen funds, along with the drop in scamming and hacking revenues, reflect improvements in security practices and market conditions.
However, the increase in ransomware attacks highlights the need for continued vigilance and cybersecurity measures. It is encouraging to see law enforcement agencies globally ramping up their efforts to tackle crypto crimes.
Overall, while there is progress being made, it is essential for individuals and organizations involved in the crypto space to remain cautious and stay informed about potential risks and security vulnerabilities.
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