Blockchain analysis firm Chainalysis says the volume of illicit transactions in the crypto space significantly dropped in 2023, marking a shift in the rising trend from 2020 to 2022.
In a new report, Chainalysis illicit addresses received just $24.2 billion in cryptocurrency value last year.
In 2020, these wallets received $9.4 billion, which rose to $23. 2 billion and $39.6 billion in 2021 and 2022, respectively.
“In addition to the reduction in absolute value of illicit activity, our estimate for the share of all crypto transaction volume associated with illicit activity also fell, to 0.34% from 0.42% in 2022.”
The estimate accounts for funds sent to addresses known as illicit and those stolen in crypto hacks. Chainalysis says the actual volume for 2023 may be higher since only known illicit addresses were accounted for.
“As always, we have to caveat by saying that these figures are lower bound estimates based on inflows to the illicit addresses we’ve identified today. One year from now, these totals will almost certainly be higher, as we identify more illicit addresses and incorporate their historic activity into our estimates.”
The report says revenue from crypto scamming and hacking revenue dropped by 29.2% and 54.3%, respectively, but inflows to ransomware and darknet markets increased following a decline in 2022. Transactions with sanctioned entities also take up the lion’s share of the illicit activities in 2023.
“Sanctioned entities and jurisdictions together accounted for a combined $14.9 billion worth of transaction volume in 2023, which represents 61.5% of all illicit transaction volume we measured on the year.”
