Chainalysis Report: Cryptocurrency Crime Trends in 2023
Introduction: In their recent report on cryptocurrency crime trends, Chainalysis researchers shed light on the dynamics of illicit activities in the digital asset market during 2023. The year marked a recovery for the industry, overcoming the scandals and price declines of 2022. The experts delved into the trends characterizing criminal activities within the sector.
Key Findings:
1. Decline in Illicit Cryptocurrency Transactions
In 2023, there was a significant drop in the total amount of cryptocurrencies received from illicit addresses, plummeting to $24.2 billion from the previous year’s $39.6 billion. Illegitimate transactions constituted a mere 0.34% of the total transfers. Analysts emphasized that “the majority of cryptocurrency activity is concentrated in stablecoins,” with stable coins rarely being utilized by extortionists and on the darknet.
2. Impact of Sanctions and Fraud
Volumes associated with sanctions and fraud emerged as critical benchmarks for analysts. Instances of fraud markedly reduced, leading to a decrease in ill-gotten gains. Intricate network metrics reveal a gradual decline in the activities of these individuals since 2021.
3. Reduction in DeFi Protocol Hacks
Researchers also noted a substantial reduction in incidents of DeFi protocol hacks. This could signify developers enhancing security measures. However, markets for ransomware and the darknet remained the most prevalent forms of crypto crime, witnessing an increase in perpetrators’ revenues.
4. Sanction-Related Transactions
In 2023, entities and jurisdictions under sanctions were involved in $14.9 billion worth of transactions, constituting 61.5% of the total volume of illegal transfers for the year. A significant portion of this sum can be attributed to services subject to restrictions imposed by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC).
Conclusion: While cryptocurrency crime shows signs of decline in certain areas, challenges persist in sanction-related transactions and illicit activities on the darknet. The industry continues to evolve, prompting ongoing efforts to enhance security measures and regulatory frameworks.
