In 2022 and 2023, a significant shift occurred in the world of cryptocurrency-related illicit activities as stablecoins eclipsed Bitcoin in terms of transaction volume.
This transformation is highlighted in the latest report by blockchain analytics firm Chainalysis, which reveals that from 2018 to 2021, Bitcoin was the “go-to cryptocurrency” for cybercriminals. However, the years 2022 and 2023 saw stablecoins taking the lead in facilitating illicit transactions.
This transition coincided with the overall surge in stablecoin activity, encompassing both lawful transactions and nefarious ones.
Nonetheless, it’s important to note that Bitcoin remains the preferred choice for certain types of illicit activities, such as darknet market sales and ransomware extortion.
Stablecoins have gained favor among cybercriminals, particularly for activities like fraudulent schemes and transactions involving sanctioned entities.
These activities represent the most substantial portion of crypto-related crimes in terms of transaction volume.
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According to Chainalysis, sanctioned entities and jurisdictions accounted for a combined transaction volume of $14.9 billion in 2023, constituting 61.5% of all illicit transactions during that year.
Chainalysis also points out that a significant portion of this volume stems from crypto services that continue to operate in regions not subject to U.S. sanctions.
This allows them to evade the reach of the United States Department of the Treasury’s Office of Foreign Assets Control.
In another positive development, blockchain security firm CertiK reported on January 4th that crypto hack revenue had decreased by more than 51% in 2023.
This marked a notable improvement in blockchain security, as noted by CertiK’s co-founder, Ronghui Gu.
Chainalysis corroborated these findings in their report, revealing a 54.3% decrease in crypto hack revenue and a 29.2% drop in profits from crypto scams.
Consequently, there has been a decline in transaction volume associated with illicit addresses in 2023.
In summary, the landscape of crypto-related illicit activities shifted dramatically in 2022 and 2023, with stablecoins taking precedence over Bitcoin for most of the illicit transaction volume.
This change is driven by the increased popularity of stablecoins among cybercriminals, particularly for fraudulent schemes and transactions involving sanctioned entities.
Despite these shifts, efforts to enhance blockchain security have yielded positive results, leading to a decline in hack revenue and scam profits, as reported by CertiK and Chainalysis.
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