Illicit cryptocurrency on-chain transaction volume hits all-time highs of $20.1 billion, growing for the second year in a row, according to a recent report by Chainalysis.
The report said:
We have to emphasize that this is a lower bound estimate: our measure of illicit transaction volume will likely grow over time as we identify new addresses associated with illicit activity.
The figure does not include profits from non-crypto native crimes, such as conventional drug trafficking that involves cryptocurrency payments.
Of the $20.1 billion, 44% came from activities associated with sanctioned entities. Last year, the US sanctioned cryptocurrency mixing services Blender and Tornado Cash, claiming they were used to launder billions of dollars from North Korea.
Additionally, the US Office of Foreign Assets Control (OFAC) implemented some of its harshest crypto sanctions in 2022. OFAC Sanctions have been estimated to have cost cybercriminals $15 million in potential revenue over the past few years. last two months.
Mainstream Cryptocurrency-Related Crimes Rejected
On a positive note, transaction volumes related to more conventional cryptocurrency-related crimes, such as dark web marketing and terrorist financing, declined. By contrast, the percentage of stolen crypto funds increased 7% year-on-year.
According to Chainalysis, the 2022 market downturn could explain the decline since the cryptocurrency market fell below $1 trillion from $3 trillion last year. Previous research has shown that crypto scams are less profitable in bear markets. The report said:
In general, less money in crypto in general tends to correlate with less money associated with crypto crime.
It is worth noting that illicit crypto activities have increased for the first time since 2019, from 0.12% in 2021 to 0.24% in 2022.
Furthermore, illicit activity in cryptocurrencies is responsible for less than 1% of the total volume. Although cryptocurrency-related crime increased in 2022, Chainalysis maintained that the trend remained downward.
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