Sanctions Fuel Record Amounts Of Crypto Passing Through Illicit Wallets In 2022

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Data: Chainalysis 2023 Crypto Crime Trends; Graphic: Axios Visuals

Illicit cryptocurrency activity hit an all-time high of $20.3 billion in 2022, according to early estimates from blockchain analytics firm Chainalysis.

By the Numbers: The new all-time high is primarily due to the growing number of crypto-related entities the US government sanctioned in 2022, according to the report.

Transactions involving sanctioned entities, such as crypto exchange Garantex and crypto mixer Tornado Cash, accounted for 44% of illicit transaction activity. that Chainalysis measures, including the ransomware and darknet markets. But this downward trend is normal in a falling market, the report notes.

Overview: Cybercriminals often rely on pseudo-anonymous cryptocurrencies due to their reputation for being harder to trace and their relative freedom from reporting regulations compared to fiat currencies.

For example, ransomware gangs often demand that ransoms be paid in bitcoin.

Between the lines: This year’s record high of $20.3 billion represents just 0.24% of all cryptocurrency activity, double last year’s share of 0.12%, but remains a tiny percentage of all transactions.

Yes, but: The researchers said the 2022 total is subject to change throughout the year as they identify new wallet addresses linked to illicit activity.

For 2021, Chainalysis initially found $14 billion worth of crypto linked to illicit activity, $4 billion less than the revised figure.

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