2024 Crypto Crime Trends: Illicit Activity Down as Scamming and Stolen Funds Fall, But Ransomware and Darknet Markets See Growth

2023 is a recovery year for cryptocurrencies, as the industry bounces back from the scandals, explosions and rate crashes of 2022. As crypto assets recover and market energy picks up heading into 2023, most believe that the crypto winter is over and a new recovery phase will soon begin.

But what does this actually mean for cryptocurrencies? Let's take a look at the main trends.

By 2023, the value fetched by illicit cryptocurrency addresses dropped significantly to $24. 2 billion. As always, we state that these figures are considered the lower end of estimates based on the inflows of funds to the illicit addresses we have identified so far. A year from now, these figures are likely to be higher as we identify more illicit addresses and include their past activity in our estimates. For example, when we published our cryptocurrency report last year, we estimated the illicit transaction volume in 2022 at $20. 6 billion. A year later, we updated our estimate for 2022 to $39. 6 billion. The increase is due in large part to the identification of previously unknown highly active addresses installed on sanctioned services, and also to the inclusion of transaction volumes related to services from sanctioned jurisdictions in the calculation. Fines.

In addition to the identification of new illegal addresses, there is another important reason why the new figure is much higher: the 2022 figure now includes $8. 7 billion in creditor claims against FTX. Last year's report even stated that it would not include transaction volumes related to FTX and other companies that went bankrupt this year under circumstances likely to be fraudulent living conditions in its conclusion of illegality until the trial was over. The jury subsequently found FTX's former CEO guilty of fraud.

Usually, estimates of illegal activity only include actual work on the circuit. In FTX's case, we cannot assess the extent of the fraud on chain data alone, as there is no way to isolate the illegal movement of user funds. Therefore, the $8. 7 billion that creditors are claiming against FTX is considered a more appropriate estimate. Given the size and impact of the FTX story, we consider it an exception to the usual on-chain approach. If the court issues a guilty verdict in a similar ongoing case, we plan to include that case in our illicit transaction data in the future.

Other final features include the absence of profits from atrocities unrelated to cryptocurrencies, for example, from ordinary drug trafficking, where cryptocurrencies are used as a means of payment. Such transactions are literally indistinguishable from legal transactions on chain data. Of course, law enforcement agencies with off-chain context have every opportunity to investigate these jets with the support of chain analysis, as everyone does. If we were in control of such information, we would treat these transactions on the data as illegal, but there are probably many cases where they are not, and as a result the number is not reflected in the overall data.

In addition to lowering the unconditional size of illegal activities, the share of all cryptocurrency transactions related to illegal activities also decreased from 0, 42% in 2022 to 0, 34%. [1]

We also note a change in the assets included in cryptocurrency crimes.

Until 2021, Bitcoin was the most well-known cryptocurrency among cybercriminals. But in the past two years, the situation has changed: now there is a huge share of all illegal transactions for permanent coins. This change has not yet taken place in conjunction with the rise of stablecoins in all crypto activities covering legal ones. However, the dominance of stablecoins is not a feature of all forms of cryptocurrency crime.

Some forms of illegal cryptocurrency transactions, such as resales on darknet markets or extortion through cash-out programs, are still mostly conducted in Bitcoin. [2] Others, transactions related to fraudulent or organized organizations, are moving to stable currencies. These forms of cryptoprefinance are considered to have the largest transaction volume, which determines their common direction. Sanctioned organizations, those operating in punitive jurisdictions, and those participating in terror financing still have a high incentive to use metric coins, since they could get into huge trouble when opening dollar classic methods in the United States, but they want to get these benefits from the power it guarantees. However, issuers of measured coins have every chance to hold on to their methods if they are known for illegal use, as was the case not long ago with Tether regarding addresses related to terrorism and military personnel in Israel and Ukraine.

Below, we look at three main trends that will show cryptocrescents in 2023 and will basically be observed in the future.

Scamming and Stolen Funds down big

Fraud and hacking cryptocurrency revenues were significant in 2023: Artican either illegal revenues fell by 29. 2 and 54. 3%, accordingly.

As we further determine in the 'Scams' section, almost all crypto-scams flood with romantic strategies, targeting private individuals and building things to provide them with hectic skills of investment, and not announcing them anywhere and everywhere, often making it difficult to open them. However, the FBI has published data that the number of reports on crypto investment scams in the United States has increased year by year until 2022, and our characteristics on the chain show that profits from scams around the world have been focused on decreasing since 2021. We believe that this is actually consistent with a long-standing trend that is in line with when the market is on the rise, scammers are safer, when the heat is high, and people actually miss out on the opportunity to enrich themselves. Of course, the consequences of romantic scams for individual victims are devastating, and it is impossible to reduce them. And while the expansion of the number of reports is considered a good symbol, at least in the United States, we believe that information on romance scams in particular is plagued by underestimation. We hope that the real toll of fraud will be more than the reports at the FBI and our statistics on the chain, but overall, fraud is declining, taking into account the broadest dynamics of the market.

On the other hand, in the event of a hack, it is much harder for the perpetrators to hide cryptocurrency, since a branch watcher may quickly notice an unusual outflow of funds from a particular service or protocol. As further determined, the decrease in the size of the stolen products is almost justified by the sharp decrease in the number of Defi-freeups. This regression has the potential to reverse a worrying long-term trend, and also shows that real Defi-protocols are taking their own way to ensure security. It is not because, at least, the characteristics of the stolen assets are highly dependent on the emission, and major hacks have the ability to resume to change their focus.

Ransomware and darknet market activity on the rise

On the other hand, ransomware and darknet are more prominent forms of cryptoprefinement that show gains from age in 2023 in the difference with Rynka 2 aggregate trends. The increase in benefits from the disappointment we saw last year then declined sharply, leading to the idea that perhaps bad actors are adapting to improve the cybersecurity of organizations, something we first saw earlier this year.

Similarly, the increase in the profits of darknet markets this year was due to a decrease in profits in 2022. This decrease was caused by the closure of Hydra, which was once the most dominant market in the world and at its peak accounted for more than 90% of the profits of darknet markets. The first market that would rent its space, in fact, did not pay attention to the fact that it was not yet noticed, the section as a whole was repaired and the joint-income is returning to the maximum value of 2021.

Transactions with sanctioned entities drive the vast majority of illicit activity

An exclusively trivial desire that is probably made when considering the size of illegal transactions is a significant proportion of transactions related to sanctions. In 2023, Sovokupa sanctions and jurisdictions spent 61, 5% of the total size of illicit transactions that we determined this year, and in fact, there was a chance of 14, 9 billion dollars. A huge share of this size falls on cryptocurrencies - services that have every possibility to continue, because they are punished by the Foreign Assets Control (OFAC) in the US report or are present in sanctioned jurisdictions and they are present in jurisdictions where punishment is condemned, the United States is not used.

These proposals have every possibility to be applied and applied for shady purposes, but it also means that the $14. 9 billion share of the transaction volume related to the penalties happens to connect the energy of regular crypto-users present in these jurisdictions. The Russian exchange Garatex, which was subject to the UK OFAC and OFSI penalties for aiding and abetting money laundering on behalf of bad actors using redemption software and other cybercriminals, was one of the huge contributors to the transaction volume related to the organizations that were subject to the penalties in 2023. Garantex continues to operate as a result of the Russian Federation not using South American penalties. Does this essentially mean that the entire size of Garantex transactions is associated with redemption software and money laundering? No. At the very least, the exposure of Garantex creates serious sanctions risks for crypto-platforms under US or UK jurispunning, but it does not mean that these platforms are obliged to be even more vigilant and inspect Garantex for prospective subjects to respond to address claims. We bring you information about cryptocurrency-based atrocities, including career programs, hacker attacks, cryptocurrency fund laundering, and more. Click here to have the absolute report on cryptocrime in 2024 delivered to your personal mailbox as soon as it is published.

More crypto crime insights to come

Final comments

The Chainalysis 2024 Crypto Crime Report

[1] The size of the transaction is the scale of all financial tasks, and such an indirect indicator actually goes from hand from hand. We delete all types of other forms of transactions that are not mentioned in pearing-chains, internal service run zones, settings, and financial transactions between individual financial entities.

[2] These numbers do not contain tokens for privacy like monero.

This book is to provide the most useful information, not specialized in providing laws, taxes, finance, investment, regulations, or other specialized consulting. The recipient needs to consult with his personal consultant before drawing such a family's conclusion. Chainalyse does not guarantee or guarantee the accuracy, perfection, timetability, appropriateness or reality of any genuine information contained in any genuine document. Chainalyse is not responsible for the adopted conclusions, as well as other impacts or unusual effects related to the introduction of materials provided by the recipient. < SPAN> [1] The transaction size is the scale of all financial operations, and such an indirect indicator actually goes from hand from hand. We delete all types of other forms of transactions that are not mentioned in pearing-chains, internal service run zones, settings, and financial transactions between individual financial entities.

[2] These numbers do not contain tokens for privacy like monero.