Blockchain analysis company Chainalysis estimated in its annual cryptocurrency crime trends report that in 2023, the value of cryptocurrencies received by illicit cryptocurrency addresses exceeded $24 billion, accounting for 0.34% of all cryptocurrency transaction volume.
These cryptocurrency amounts related to illicit activities were nearly 40% less than in 2022, but this is only temporary. Over time, more and more addresses will be identified as illicit, and the total of $24.2 billion may increase. The current cryptocurrency crime amount for 2022 is $39.6 billion, but when Chainalysis released a related report last year, only $20.6 billion in value was confirmed.
A notable aspect of this study is the prevalence of transactions related to sanctioned entities. In 2023, the total volume of transactions related to sanctioned entities and jurisdictions reached $14.9 billion, accounting for 61.5% of the total illicit transaction volume, with most of these transactions being driven by cryptocurrency services sanctioned by the U.S. Office of Foreign Assets Control (OFAC) or located in sanctioned jurisdictions.
This $14.9 billion includes transactions from some regular cryptocurrency users residing in sanctioned areas. After all, not all users of the Russian cryptocurrency exchange Garantex, sanctioned by U.S. and U.K. authorities, are using cryptocurrencies for money laundering and ransomware activities.
Stablecoins have seen an increase in their share of illegal transactions
Like the previous year, stablecoins accounted for the majority of illegal transaction volume in 2023. Prior to 2022, Bitcoin was the preferred cryptocurrency for criminals; however, this changed in 2022, with stablecoins accounting for about two-thirds of the total illicit transaction volume.
On the other hand, Chainalysis’ research shows significant decreases in the amounts related to cryptocurrency scams and hacking attacks last year, decreasing by 29.2% and 54.3% respectively, while the amounts related to ransomware and dark web activities have increased.
Source: Chainalysis