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Illicit crypto activity and scams went down in 2023, even putting aside the FTX scandal.
Excerpts from a new Chainalysis report, due out in February, detail how crypto scamming and hacking fell 29.2% and 54.3% respectively.
Stolen cryptocurrency accounted for 0.34% of total on-chain transactions in 2023, totaling $24.2 billion. The previous year's stolen crypto totaled $39.6 billion, representing 0.42% of total on-chain transactions.
Of course, the elephant in the room of 2022 was FTX's collapse, which resulted in $8.7 billion in creditor claims.
“In last year’s report, we said that we would hold off on including transaction volumes associated with FTX and other firms that collapsed that year under allegedly fraudulent circumstances in our illicit totals until legal processes played out,” Chainalysis said.
Chainalysis said it regards the FTX situation as "an exception" to its usual on-chain methodology and if courts convict in similar cases, activity will be included in their illicit transaction data.
Stablecoins now account for the majority of illicit transactions, dethroning Bitcoin, which held the title until 2021. Whilst crimes such as darknet market sales and ransomware extortion still occur predominantly in Bitcoin, scamming has shifted to stablecoins.
Recently, the United Nations (UN) warned that USDT has become one of the most prominent payment methods for money laundering and scams in Southeast Asia.
“Online gambling platforms, especially those operating illegally, have emerged as among the most popular vehicles for cryptocurrency-based money launderers, particularly for those using Tether,” the UN report said, according to the Financial Times.
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