In a world where digital technology is evolving at a breakneck pace, cryptocurrencies are both a source of fascination and controversy. Recent research by Chainalysis sheds new light on this dynamically changing landscape, revealing a significant decline in cryptocurrency-related crime in 2023.
Cryptocurrencies, long associated with anonymity and freedom from central oversight, have gained popularity in recent years. However, this digital world has not been free from darker aspects, such as fraud and theft. The 2023 Chainalysis report sheds new light on this issue, indicating a significant decrease in crime in the world of cryptocurrencies.
The analysis shows that in 2023, the amount of cryptocurrencies stolen through fraud decreased by almost one-third compared to 2022. Total illegal revenues fell by more than 54%. These values refer to transactions on blockchains, which in 2023 accounted for 0.34% of the total transaction value, reaching $24.2 billion. Compared to 2022, when it was 0.42% of the total value, i.e., $39.6 billion.
However, as Chainalysis notes, the higher value in 2022 also resulted from the inclusion of $8.7 billion in FTX creditor claims in the statistics. In November 2023, FTX founder Sam Bankman-Fried was found guilty of seven counts of fraud and conspiracy, which influenced the company’s analysis.
It is also interesting that while Bitcoin remains the most popular cryptocurrency, it is no longer the first choice of criminals. In recent years, instead of Bitcoin, scammers are increasingly choosing stablecoins. “Until 2021, Bitcoin was the undisputed leader among digital currencies preferred by cybercriminals, probably due to its high liquidity,” says Chainalysis. “However, over the past two years, this has changed, and now stablecoins account for the majority of all illegal transactions.”
Despite the decrease in the amount of stolen cryptocurrencies, other forms of crime, such as ransomware and darknet activity, have recorded a significant increase in revenue compared to the previous year. This indicates the ongoing challenges in combating digital crime.
In the context of these data, Massachusetts Senator Elizabeth Warren, a long-time critic of cryptocurrencies, has called on federal regulators to take more action against illegal activities related to digital currencies. In December, she stated that cryptocurrency lobbyists “undermine” the fight against cryptocurrency-financed terrorism.
The report also highlights that organized transnational crime in Southeast Asia has evolved, adopting new technologies, including cryptocurrencies, for money laundering and other activities. The United Nations Office on Drugs and Crime (UNODC) has reported an increase in money laundering using online casinos in the region.
The 2023 Chainalysis report shows that despite the decrease in the amount of cryptocurrency theft, challenges related to crime in this sector remain significant. With the growing popularity and evolution of cryptocurrency technologies, continuous monitoring and adaptation of strategies to combat digital crime are necessary.
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