Stablecoins Now Account for the Majority of Illicit Transactions in Crypto, Says Chainalysis
In its recent crypto crime report, blockchain analytics firm, Chainalysis, underscores that between 2018 and 2021, Bitcoin held the position as the favored ‘cryptocurrency of choice’ for criminals. Nonetheless, the scenario shifted in 2022 and 2023, with stablecoins taking the lead in terms of illicit transaction volume.
In 2022 and 2023, stablecoins became the preferred choice for the majority of illicit transactions as cybercriminals explored alternative means of conducting transactions, moving away from reliance on Bitcoin.
In its recent crypto crime report, blockchain analytics firm, Chainalysis, underscores that between 2018 and 2021, Bitcoin held the position as the favored ‘cryptocurrency of choice’ for criminals. Nonetheless, the scenario shifted in 2022 and 2023, with stablecoins taking the lead in terms of illicit transaction volume.
The report observes that this shift coincides with the overall rise in activity related to stablecoins, encompassing both lawful transactions and illicit ones. Despite this evolution, Bitcoin remains prevalent in various criminal activities, such as darknet market sales and ransomware extortion.
“Sanctioned entities and jurisdictions together accounted for a combined $14.9 billion worth of transaction volume in 2023, which represents 61.5% of all illicit transaction volume we measured on the year.”
The report emphasizes that a significant portion of this volume is influenced by cryptocurrency services endorsed by the United States Department of the Treasury’s Office of Foreign Assets Control. These services persist in operating from jurisdictions where U.S. sanctions are not applied.
Generally, 2023 witnessed a notable decline in the value received by illicit cryptocurrency addresses, amounting to a total of $24.2 billion.
Crypto scamming and hacking revenue both fell significantly in 2023, with total illicit revenue for each down 29.2% and 54.3% respectively.
“Many crypto scammers have now adopted romance scam tactics, targeting individuals and building relationships with them in order to pitch them on fraudulent investing opportunities, rather than advertising them far and wide, which often makes them more difficult to uncover,” Chainalysis said.
Ransomware and darknet markets, on the other hand, are two of the most prominent forms of crypto crime that saw revenues rise in 2023, in contrast with overall trends, according to Chainalysis.