According to a preliminary excerpt from the Chainalysis report, which will be released in full in February, the amount of cryptocurrency stolen through fraud last year fell by almost a third compared to 2022. Overall illicit profits have fallen by more than 54%, according to the blockchain analytics firm.
According to Chainalysis, stolen cryptocurrencies accounted for 0.34% of all on-chain transactions in 2023, totaling $24.2 billion, compared to 0.42% or $39.6 billion in 2022. The 2023 total includes funds sent to company addresses identified as “illegal” and funds stolen through hacking.
Chainalytic noted that the 2022 figure was much higher, with FTX creditor claims including $8.7 billion.
“In last year’s report, we stated that we would hold off on including volumes related to FTX and other companies that went bankrupt on fraud charges that year in illicit totals pending legal proceedings,” the company said.
On November 2, a jury of nine women and three men found FTX founder Sam Bankman-Fried guilty on seven counts of fraud and conspiracy, which resulted in Chainalysis I included FTX.
Last August, Optimism Network’s credit markets were hacked, with cybercriminals stealing 4,323.6 ETH, worth about $7 million at the time. Last October, Canadian authorities said citizens had lost more than $22.5 million to cryptocurrency-related scams.
Last November, the U.S. Department of Justice indicted Zhong Shi Gao, Naifeng Xu, and Fei Jiang on charges of laundering more than $10 million in cryptocurrency. If convicted, the three face 30 years in federal prison. That same month, Chainalysis reported that Tether worked with the Department of Justice (DOJ) to freeze $225 million USDT related to human trafficking.
Chairalytic also highlighted that while Bitcoin remains the top cryptocurrency, it is no longer number one among scammers who are turning to stablecoins.
“By 2021, Bitcoin remained the most preferred cryptocurrency for cybercriminals due to its high liquidity,” Chainalysis said. “However, things have changed over the past two years: stablecoins now account for the majority of all illicit trading volume,” the company said. He added that the dominance of stablecoins does not apply to all forms of cryptocurrency-based crime.
Chainalysis said that although the amount of stolen cryptocurrency has decreased, sales have increased significantly compared to the previous year due to criminal activity such as ransomware and darknet market activity.
Massachusetts Sen. Elizabeth Warren, a longtime critic of cryptocurrencies, urged federal regulators to do more to crack down on illegal activity using digital currencies. In December, Warren said cryptocurrency lobbyists were “undermining” the fight to stop cryptocurrencies from financing terrorism.
“We are writing about a troubling new report that shows your association and other cryptocurrency interests are using a small army of former Department of Defense, national security and law enforcement officials on your behalf to undermine bipartisan efforts. Congress and the Biden administration must address the role of cryptocurrencies in financing Hamas and other terrorist organizations,” Warren wrote in a letter to the Blockchain Association.
On Tuesday, the United Nations Office on Drugs and Crime (UNODC) reported an increase in money laundering using online casinos in East and Southeast Asia.
Transnational organized crime in Southeast Asia has developed rapidly in recent years. This change has been manifested first and most significantly by the increase in cross-border trafficking of synthetic drugs and other goods. But the environment has changed,” Jeremy Douglas, regional representative for Southeast Asia and the Pacific, said in the UN report. “Major transnational organized crime groups have embraced technology and revolutionized the local criminal landscape.”
Edited by Ryan Ozawa.
