Chainalysis indicated that revenues for crimes involving cryptocurrency hacking and scamming "both fell significantly in 2023." Revenues from crypto hacks saw a decrease by 54.3% in 2023, while those from crypto scams dropped by 29.2%. Transactions associated with sanctioned entities constituted the majority of illicit activity, representing $14.9 billion or 61.5% of transaction volume in 2023. According to Chainalysis, many of these transactions are linked to crypto services that have been sanctioned by the U.S Department of Treasury's Office of Foreign Assets Control (OFAC) or operate within sanctioned jurisdictions. The report stated that these entities continue operating as their jurisdictions do not enforce U.S sanctions.
The type of digital asset most commonly used in "illicit" activities has shifted from Bitcoin to stablecoins, as per the Chainalysis report findings. Until 2021, Bitcoin accounted for more than half of "illicit" transactions; however, in 2023, Bitcoin was used in less than a quarter of such transactions. Stablecoins were involved in approximately 60% of "illicit" transactions during the same year.
Adrian Zduńczyk, founder of The Birb Nest, commented on the Chainalysis report, stating that regulations such as Europe's Markets in Crypto-Assets (MiCA) legislation and anti-money laundering (AML) standards should lead to a decrease in crypto-related crimes over time. "Eventually, the new MiCA regulations and AML compliance over crypto businesses will help tackle this problem, taking off the stigma of crypto," said Zduńczyk.
Chainalysis provides research and data to both private and public sector partners across more than 70 countries, as stated on the company's website. Data from Chainalysis supports compliance and investigation efforts aimed at combating criminal activities within the cryptocurrency ecosystem. The company was co-founded by Michael Gronager and Jonathan Levin.
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