The amount of cryptocurrencies stolen through scams last year was about a third lower than in 2022, according to advance excerpts from a report by Chainasis that will be published in full in February. According to the blockchain analysis firm, total illicit revenues have decreased by more than 54%.
Chainalysis said stolen cryptocurrencies accounted for 0.34% of total on-chain transactions in 2023 and totaled $24.2 billion compared to 0.42%, or $39.6 billion in 2022. The total for 2023 included funds sent to company addresses identified as “ Illegal” and money stolen in the hack.
Image: String analysis
Chainalysis noted that the 2022 amount was significantly higher due to the inclusion of $8.7 billion in claims from FTX creditors.
“In last year’s report, we said we would delay including transaction volumes associated with FTX and other companies that collapsed that year under allegedly fraudulent circumstances in our illicit totals until the legal proceedings concluded,” the company said.
On November 2, a jury of nine women and three men found FTX founder, Sam Bankman-Fried, guilty of seven counts of fraud and conspiracy, which Chaina Analysis led to FTX's listing.
The Optimism Network credit market was hacked in August, with cybercriminals stealing 4,323.6 ETH, about $7 million at the time. In October, Canadian authorities said citizens lost more than $22.5 million in scams involving cryptocurrencies.
In November, the US Department of Justice charged Zhong Shizhao, Naifeng Xu, and Fei Jiang with laundering more than $10 million in cryptocurrencies. The trio faces 30 years in prison if convicted. In the same month, Chainalysis reported that Tether froze $225 million in USDT linked to human trafficking in cooperation with the Department of Justice.
Chairalys also highlighted that although Bitcoin is still the number one cryptocurrency, it is no longer number one among scammers – who have instead turned to stablecoins.
“Until 2021, bitcoin reigned as the cryptocurrency of choice among cybercriminals, likely due to its high liquidity,” Chainalysis said. “But this has changed over the past two years, with stablecoins now accounting for the majority of illicit transaction volume,” the company said, adding that stablecoin dominance is not the case for all forms of cryptocurrency-based crime.
Although the amount of stolen cryptocurrencies decreased, criminal activity, including ransomware and dark web market activities, saw significant increases in revenue compared to the previous year, Chainalysis said.
Massachusetts Sen. Elizabeth Warren, a longtime critic of cryptocurrencies, called on federal regulators to do more to crack down on illegal activity using digital currency. In December, Warren said that cryptocurrency lobbyists were “undermining” the fight to stop terrorist financing using cryptocurrencies.
“I am writing regarding a disturbing new report that your association and other cryptocurrency interests are ‘flexing a not-so-secret weapon: a small army of defense, national security, and former law enforcement officials’ to work on your behalf to undermine bipartisan counterterrorism efforts,” Warren wrote in a letter to the Blockchain Association. : “Congress and the Biden administration must address the role of cryptocurrency in financing Hamas and other terrorist organizations.”
On Tuesday, the United Nations Office on Drugs and Crime (UNODC) reported a rise 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 was first and most profoundly characterized by the growth of cross-border trafficking in synthetic drugs and other goods, but the landscape has changed,” Regional Representative for Southeast Asia and the Pacific Jeremy Douglas said in the UN report. “Major transnational organized crime groups have embraced the technology and revolutionized the crime environment in the region.”
Edited by Ryan Ozawa.
