Down Big: Crypto Scamming Numbers Reduced In 2023 – Report
January 18 2024 - 7:00PM
NEWSBTC
2023 started with a challenging overall landscape for the crypto
market that continued throughout the rest of the year. However, the
market saw a recovery with a spike in bullish sentiment and ended
the year on a positive note. Additionally, 2023 saw a decline in
crypto scamming and crypto-related illicit activity compared to the
previous year, as new data shows. Related Reading: By The Numbers:
Crypto Users Lose $300 Million To Phishing Scams In 2023 Illicit
Activity Market Revenue Decline In 2023 American blockchain
analysis firm Chainalysis released its 2024 Crypto Crime Report
detailing the trends and figures that crypto-related illicit
activities saw in 2023. The firm’s data shows a significant drop in
value received in cryptocurrency addresses used for illicit
activities, totaling $24.2 billion. This is a considerable
reduction compared to the 2022 updated estimate of $39.6 billion.
In addition, the share of all crypto transaction volume associated
with illicit activity reduced from 0.42% in 2022 to 0.34% in 2023.
According to the report, there seems to be a shift in the type of
assets involved in crypto-related crime activities over the last
two years, with Bitcoin no longer being the most used asset for
most illicit transactions. Alternately, stablecoins have become a
more popular choice for crypto assets involved in illicit
activities, as the report states. This increase could be attributed
to the recent general growth of stablecoins’ share of all crypto
activity overall. The shift to stablecoins is not seen in every
related crime, with activities, such as darknet market sales and
ransomware extortion, still taking place predominately in Bitcoin.
Nonetheless, it’s worth noting that their issuers can trace
stablecoins, and funds can be frozen when addresses are linked to
illicit activities, as Tether did back in 2023. Illicit transaction
volume by asset type, 2018-2023. Source: Chainalysis Trends That
Defined Crypto-Related Crime In 2023 Chainalysis on-chain metrics
suggest that scamming revenues have been trending globally since
2021. Although these crimes are still underreported, “overall,
scamming is down, given broader market dynamics.” Romance scams,
such as ‘pig butchering,’ are among the most popular crypto
scamming tactics used by scammers and are one of the biggest forms
of related crime by transaction volume. Regarding crypto hacking,
the firm believes that “the decline in stolen funds is driven
largely by a sharp dropoff in DeFi hacking,” it could represent
“the reversal of a disturbing, long-term trend.” In 2023, crypto
scamming and hacking revenue fell significantly, with the total
revenue decreasing 29.2% and 54.3%, respectively. In contrast to
the overall trends, ransomware and darknet markets, two of the most
prominent forms of related crime, saw revenues rise in 2023.
Similarly, 2023’s growth in darknet market revenue comes after a
2022 decline in revenue. The report shows that transactions with
sanctioned-related entities and jurisdictions drive most of the
illicit activity as entities and jurisdictions move towards using
stablecoins and other crypto assets to bypass restrictions. They
accounted for a combined $14.9 billion transaction volume in 2023,
representing 61.5% of all illicit transactions over the year.
Chainalysis explains that: Most of this total is driven by
cryptocurrency services that were sanctioned by the U.S. Department
of the Treasury’s Office of Foreign Assets Control (OFAC), or are
located in sanctioned jurisdictions, and can continue to operate
because they’re in jurisdictions where U.S. sanctions are not
enforced. Ultimately, the report addresses that not all
sanction-related transactions are due to the illicit use of digital
assets, as some of that $14.9 billion volume is related to the
average users who reside in the sanctioned jurisdictions. Related
Reading: NFT Scams: Types And How To Avoid Them Bitcoin trading at
$41,906.6 on the hourly chart. Source BTCUSDT on TradingView.com
Featured image from Unsplash.com, Chart from TradingView.com
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