Cypher
BlockchainCrypto HacksCryptocurrencyCryptocurrency RegulationCryptocurrency TrendsNews

Chainalysis Report Shows Crypto Crime Decrease By 29% in 2023

 As criminals intensify their activities in the crypto sector investors expressed concerns about the safety of the digital industry. The rise of crypto crime has attracted the attention of global investors and blockchain security firms. 

On Wednesday the Chainalysis team reviewed the 2023 crypto-related crimes. In their findings, the Chainalysis team noted that the amount stolen from the crypto sector in 2023 was less than a third of that of 2022. This implies that in 2022 investors lost a substantial amount of crypto compared to 2023. 

Rise of Crypto Crime

The Chainalysis team noted revenue generated from illicit crypto activities dropped by 54% in 2023. Subsequently, the blockchain analytic firms observed that crypto assets stolen from the on-chain platform dropped to 0.34% from 0.42% in 2022. 

Similarly, the report illustrated that the amount of stolen crypto assets dropped to $24.2 billion from $39.6 billion in 2022. Based on the Chainalysis research the blockchain analysts noted that most crypto-related crimes were executed in 2022. 

Cypher

To examine the damages caused by the hacks, illicit activities and fraudulent schemes Chainalysis examined the factors contributing to the rise of crypto crimes. 

They observed that the number of crypto crimes increased in 2022 due to the FTX implosion which resulted in a loss of over $8.7 billion. Following the collapse of the Bahamian crypto exchange Chainalysis noted that most of the customers were plunged into financial woes. 

This illustrated that the liquidation of FTX affected most of the customers and businesses exposed to the controversial crypto exchange. The huge losses linked to the collapse of FTX forced the Chainalysis team to exclude the transaction volumes tied to the collapsed crypto exchange on its annual report.

📰 Also read:  Bitcoin Below $70K After Drop Wiped $1.3B BTC Open Interest

The Chainalysis team grouped losses from the FTX under the illicit activities categories.

2023 Crypto Crime Analysis

Besides the FTX saga, the Chainalysis team noted that the notorious illicit groups shifted their focus to the crypto industry. A review of the 2023 hacking incidents demonstrated that the hackers managed to escape with substantial amounts of crypto assets. 

In August, nearly $7 million was drained from the Optimism Network. Shortly after the Optimism incident, the Canadian regulatory authorities noted that over $22.5 million was lost in crypto scams. 

Later in November the US Department of Justice convicted three crypto investors Zhong Shi Gao, Fei Jiang and Naifeng Xu for laundering over $10 million in cryptos. Remarkably the enforcement action taken by global regulators impacted the recovery of measurable amounts of crypto assets. 

From the Chainalysis assessment, the blockchain analyst noted that the criminals are targeting to steal stablecoin due to its ability to store value amid the volatile crypto market. 

In the previous bull market, the scammers preyed on Bitcoin investment to maximize their returns. With the pro-long bear market, Chainalysis noted that stablecoin emerged as the preferred cryptocurrency for illicit activities. 

Factors Contributing to Increase in Illicit Crypto Activities

Based on the development of the crypto industry the Chainalysis revenue generated from illicit activities such as the ransomware and darknet market increased in 2023 compared to 2022. 

📰 Also read:  Kabosu, the Iconic 'Doge' Meme Dog, Passes Away

The surge in illicit activities in the cryptosphere attracted the attention of global policymakers. For the past few months, Massachusetts Senator Elizabeth Warren called for enforcement action against illegal crypto activities. 

Last month Senator Warren condemned pro-crypto legislators for undermining the ongoing clampdown on the use of crypto in terrorism financing. Following the damages caused by the Hamas-Israeli war Senator Warren proposed strategies to weaken the operation of illicit groups. 

Firstly the Massachusetts senator drafted a bill of digital assets highlighting the need to regulate the crypto industry. Speaking at the Blockchain Association Senator Warren presented the draft bill and urged the US regulators to collaborate in addressing the crypto terrorism financing schemes.

 Since then other US Senators supported the Warren bill for digital assets and urged the Biden administration to address the potential regulatory gaps in the crypto industry. 


Tokenhell produces content exposure for over 5,000 crypto companies and you can be one of them too! Contact at info@tokenhell.com if you have any questions. Cryptocurrencies are highly volatile, conduct your own research before making any investment decisions. Some of the posts on this website are guest posts or paid posts that are not written by Tokenhell authors (namely Crypto Cable , Sponsored Articles and Press Release content) and the views expressed in these types of posts do not reflect the views of this website. Tokenhell is not responsible for the content, accuracy, quality, advertising, products or any other content or banners (ad space) posted on the site. Read full terms and conditions / disclaimer.

📰 Also read:  OpenAI Report Reveals AI Tools in Global Disinformation Campaigns

Cypher

Kimberly Crain

Kimberly Crain is a seasoned crypto trader and writer, offering valuable insights into the digital asset market. With expertise in trading strategies and a passion for blockchain technology, her concise and informative articles empower readers to navigate the evolving world of cryptocurrencies.

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button
Close
Skip to content