Researchers at Chainalysis have confirmed that illegal cryptocurrency activity reached an all-time high of $20.1 billion in 2022. This is an increase from $18 billion the previous year, largely due to increasing cryptocurrency sanctions.
The past year has been especially turbulent for cryptocurrencies, with the FTX scandals and collapse, and firms like Celsius and Three Arrows Capital suffering their own claims of fraud and bankruptcy.
Despite the urge to include those firms within the numbers of criminal enterprises, Chainalysis decided to keep its report focused on “illicit activity that can be measured on-chain.”
The $20.1 billion is a “lower-bound estimate” that may increase as Chainalysis investigates further blockchain activity.
In what most would find surprising, Chainalysis found that the overall percentage of illicit cryptocurrency transactions is minuscule. “Overall, illicit activity in cryptocurrency remains a small share of overall volume at less than 1%. It’s also worth keeping in mind that despite this year’s jump, crime as a share of all crypto activity is still trending downwards,” the report states.
Cybercriminals continue to utilize cryptocurrencies like bitcoin as the funds of choice for ransomware attacks. But, bullish cryptocurrency investors and firms should take comfort in the digital asset market remaining almost entirely legitimate—according to Chainalysis, at least.
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