Crypto crime is reaching an all-time high thanks to sanctions violations

Crypto crime is reaching an all-time high thanks to sanctions violations

The blockchain data platform Chainalysis has conducted a new investigation into crypto crime. This shows that despite the market decline, the illicit transaction volume of cryptocurrency has increased for the 2nd consecutive year. In fact, it has reached an all-time high of at least $20.1 billion by 2022.

The Crypto Crime Report

This is evident from the new annualCrypto Crime Reportby Chainalysis. Also, this report shows that the transaction volume related to sanctions, largely associated with crypto trading platforms in Russia, increased by more than 10 million percent from 2021 to 2022 compared to last year. These activities therefore accounted for the largest part of the total illegal transaction volume (44%).

Nevertheless, there are also plenty of positive findings in this report. Traditional forms of crypto crime that took the upper hand in 2021 – such as scams, terrorist financing and fraud cases – are all down on a year-over-year basis. Only the transaction volumes related to stolen crypto increased by 7%, but this percentage also shows a significantly slowed growth rate compared to the previous year. Then it was almost 6x higher than the year before.

Despite this increase, illegal activities account for only 0.24% of the total transaction volume. Almost all other conventional forms of crypto-crime have fallen. Kim Grauer, Director of Research at Chainalysis, said:

The events of 2022 show that, despite the inherent transparency of blockchains, there remains room for improvement. For example, there are opportunities to connect off-chain commitment data with on-chain data to provide better visibility. Also, the transparency of all on-chain transactions in DeFi is a standard that all crypto services should strive for. As more and more value is transferred to the blockchain, all potential risks will also become visible and we will have more complete transparency.

In the coming weeks, this report will be expanded with the latest figures on hacks, ransomware and darknet markets.


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