Illicit crypto transactions hit all-time high despite market downturn
Chainalysis's most recent report shows that illicit cryptocurrency transaction volume surged for the second year in a row, reaching an all-time high of $20.1 billion.
Image from Shutterstock
Illicit cryptocurrency transaction volume surged for the second year in a row, reaching an all-time high of $20.1 billion, Chainalysis's most recent report showed.
Last year, the cryptocurrency industry experienced significant turmoil, with several major crypto companies facing collapse, including TerraLabs, Celsius, Three Arrows Capital, FTX, and others, and others being accused of fraud and bringing down the entire crypto market. Despite the ongoing bear market or crypto winter [long period of low and dropping prices], the market analysis shows that illicit transactions using cryptocurrencies hit all-time high numbers in 2022.
Data shows, that the unlawful usage of digital currencies primarily involved bypassing sanctions. Profits from scams had the second biggest share in transaction volume. Stolen funds and transactions related to darknet markets also contributed to the illegal usage of crypto.
More from Cybernews
Sainsbury’s installs more facial rec tech in stores: Should shoppers be worried?
"Phantom squatting” uses AI hallucinated domains for cyber attacks
What they’re doing to gamers is a robbery in broad daylight
Irish parliament expands Microsoft use, despite the EU’s efforts to ditch it
Can government AI actually scrub UAP footage from the internet?
The EU and Apple CEO Tim Cook held "constructive" talks after their Siri AI dispute in Europe
Compared to previous years, there was a significant increase in the use of cryptocurrency to evade sanctions, with transaction volume seeing a rise of 10,012,224.34% and taking a share of 44% of all illicit transactions. The massive increase in crypto usage by nation-states is attributed to strict sanctions implemented on Iran and Russia by the European Union and the US.
The volume of transactions decreased for all types of cryptocurrency-related crime except for stolen funds, which increased by 7%. The market downturn may be a contributing factor. Previous research by Chainalysis showed that people are less likely to be caught in crypto-related scams during the recession. That's why revenue from this illicit activity shows a decrease.
Despite the surge in illicit transactions, overall cryptocurrency usage in crime stays low, having a share of less than 1% of all crypto transactions.