Blockchain analytics firm Chainalysis reports a notable recovery in the cryptocurrency industry in 2023, indicating a rebound from the previous year’s downturn. The firm observed a significant decrease in crypto-related crime, suggesting the end of the ‘crypto winter’ as market activity increased and prices stabilized.
Chainalysis highlighted a substantial drop in the number of illegal crypto wallet addresses and the value of stolen cryptocurrencies. Despite a total illicit value of $24.2 billion in the previous year, the firm cautions that updated figures could increase due to new fraud cases, such as the $8.7 billion in claims against FTX following CEO SBF’s fraud conviction.
The report notes a significant decline in revenues from crypto fraud and hacking activities in 2023, with illegal income dropping by 29.2% and 54.3%, respectively. However, ransomware and darknet market revenues bucked the trend, indicating that hackers are adapting to advancements in cybersecurity measures.
Sanctioned entities contributed $14.9 billion to total transaction volume in 2023, accounting for 61.5% of all illegal transaction volume. Despite overall improvements in crypto crime throughout the year, another report suggests December was the worst month.
A recent UNODC report also raised concerns about the misuse of crypto in East and Southeast Asia, where criminal organizations are increasingly using chatbots and deepfake technology, presenting challenges for law enforcement.