The cryptocurrency sector has often been associated with criminal activity, but Chainalysis' report for 2023 reveals a significant drop in crypto crime. Indeed, illicit activity accounts for just 0.34% of total transaction volume, a 40% decrease compared to 2022. This marks a turning point in the perception of the sector, often seen as a haven for money laundering or terrorism.
The year 2022 saw an increase in illicit activity related to cryptocurrencies, mainly due to US sanctions related to the war in Ukraine. Total illicit activity reached almost $40 billion, an all-time high. However, 2023 marks a turnaround, with a significant drop in these activities.
In 2023, there was a notable decrease of 40% compared to the previous year, reaching a total amount of $24.2 billion. The main reason for this drop is that the "$8.7 billion in creditor claims against FTX" (in light green), originally scheduled for 2023, have been reclassified to 2022.
Contrary to the conventional wisdom that Bitcoin is the cryptocurrency of choice for cybercriminals, Chainalysis points out that stablecoins now account for the majority of illicit transactions. "Until 2021, Bitcoin reigned supreme as the cryptocurrency of choice among cybercriminals, but this has changed over the past two years," the report states. Stablecoins, despite their centralisation, appear to offer criminals advantages that Bitcoin no longer has.
Although Bitcoin remains popular for certain fraudulent activities, the overall share of illicit transactions in the cryptocurrency sector is falling. "Our estimate of the share of overall crypto transaction volume associated with illicit activity has also decreased from 0.42% to 0.34% in 2022," Chainalysis says. This trend suggests a decrease in the use of cryptocurrencies for criminal purposes.
