Illicit crypto addresses received at least US$24.2 billion in 2023: report
AT LEAST US$24.2 billion worth of crypto was sent to illicit crypto wallet addresses in 2023, including addresses identified as sanctioned or linked to terrorist financing and scams, crypto research firm Chainalysis said on Thursday (Jan 18).
Cryptocurrencies enable people to send money around the world without using the mainstream financial system. The underlying blockchain technology creates a record of transactions where senders and receivers are identified only by their wallet addresses, which are a string of letters and numbers.
Chainalysis said the US$24.2 billion number is almost certainly an underestimation and will rise as it identifies more illicit addresses. It also said it had doubled its 2022 estimate to US$39.6 billion from US$20.6 billion.
Chainalysis’ data only includes crypto-related crime. It said it was impossible to determine from blockchain data alone the volume of cryptocurrency that is the proceeds of non-crypto-related crime, for example when cryptocurrency is the means of payment in drug trafficking.
Instead, the firm counted crypto sent to wallet addresses identified as illicit, plus the volume of funds stolen in crypto hacks.
Chainalysis said sanctioned entities and jurisdictions together accounted for a combined US$14.9 billion worth of illicit transaction volume in 2023, which represents 61.5 per cent of all illicit transaction volume it measured on the year.
GET BT IN YOUR INBOX DAILY
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Of this total, most came from crypto services sanctioned by the US or located in US-sanctioned jurisdictions where US sanctions are not enforced.
Revenue from crypto scamming and hacking fell in 2023, Chainalysis said, but ransomware and darknet markets saw revenues rise.
Various other types of illicit addresses were identified in the report, including those linked to terrorist financing, cybercrime and child abuse material.
The US has said it will crack down on crypto firms which fail to block and report illicit money flows. Last year, the founder of crypto exchange Binance pleaded guilty to breaking US anti-money laundering laws.
A United Nations report on Monday said that unregulated cryptocurrency exchanges have become “foundational pieces” of financial architecture used by organised crime in South-east Asia.
Bitcoin was the top cryptocurrency used by cybercriminals in 2021, but stablecoins have become more dominant in the last two years, now accounting for the majority of all illicit transaction volume, Chainalysis said. REUTERS
KEYWORDS IN THIS ARTICLE
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Companies & Markets
ExxonMobil sees Hess arbitration dragging into 2025, CEO says
Gold prices tick higher on US rate cut bets
Nomura targets 20% revenue growth from global markets business
FLCT posts 1.1% lower H1 DPU of S$0.0348 on higher vacancies, expenses
Singapore shares rise at Tuesday’s open tracking global rally; STI up 0.2%
Segantii allegations roil a go-to block trader for global banks