Chainalysis Reveals Decline in Crypto Crime, Shift to Stablecoins in 2024 Crime Report

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Chainalysis’ latest report reveals a dual trend in the 2023 crypto crime landscape: a notable decrease in overall value of criminal transactions and a surprising shift from bitcoin to stablecoins as the preferred medium for illicit activities.

2024 Chainalysis Report Reveals a Decline in Crypto Criminal Activity, Shift in Currency Preference to Stablecoins

In a revealing analysis of the cryptocurrency landscape, the 2024 Crypto Crime Trends Report by Chainalysis has potentially revealed shifts in the pattern of illicit activities within the digital currency space. The report, which provides a still-developing view of crypto-related crimes in 2023, has highlighted a notable decrease in the overall volume of criminal transactions, alongside a turn towards stablecoins by cybercriminals.

According to Chainalysis, the total value received by illicit cryptocurrency addresses in 2023 fell to $24.2 billion, marking a considerable decrease compared to previous years. This figure, however, is an underestimation and is expected to rise as more illicit addresses are uncovered. Apropos, the report revised the 2022 illicit transaction volume from an initial estimate of $20.6 billion to $39.6 billion, a more than 90% increase. This significant revision is attributed to the identification of new illicit addresses and the inclusion of transactions from sanctioned services.

Another reason the new total is so much higher, is the inclusion of $8.7 billion in creditor claims against the now-defunct cryptocurrency exchange FTX, following the fraud conviction of its CEO. This decision represents a departure from Chainalysis’ standard methodology, which typically focuses on measurable on-chain activity.

In a notable shift, the report observes that stablecoins have surpassed bitcoin as the preferred currency for illicit transactions. This change in preference aligns with the overall increase in stablecoin usage in both legitimate and illicit crypto activities. Despite this trend, bitcoin continues to dominate in specific criminal activities, such as darknet market sales and ransomware extortion.

Other key findings include a significant reduction in revenues from crypto scamming and hacking, which decreased by 29.2% and 54.3% respectively. The report attributes these reductions to a change in scamming strategies and improvements in defi protocol security.

The report also sheds light on the increasing role of transactions with sanctioned entities, which accounted for a significant 61.5% of all illicit transaction volumes in 2023. This trend raises questions about how to distinguish between criminal activities and legitimate transactions within sanctioned jurisdictions.

The report has garnered mixed reactions on social media, providing a striking example of confirmation bias in action. Both crypto enthusiasts and detractors have cited the report to bolster their opposite opinions on digital assets.

Overall, do you think crypto-based crime represents an increasing or decreasing amount of total crypto transaction volume? Share your thoughts and opinions about this subject in the comments section below.