Cryptocurrency-Based Crime Trends 2023: A Report by Chainalysis

Overall Trend

Scamming revenues globally have been trending down since 2021. This decline is likely due to market dynamics, where scamming is more successful when markets are up and people feel like they’re missing out on an opportunity to get rich quickly.

Romance Scams: A Devastating Impact on Individual Victims

Despite a decline in overall scamming revenue, romance scams continue to have a devastating impact on individual victims.
Reporting of romance scams may be underreported, which could lead to an underestimate of the true damage caused by these types of scams.

Crypto Hacking: A Significant Drop-Off in Stolen Funds

Crypto hacking has seen a significant drop-off in stolen funds, driven largely by a sharp decline in DeFi (Decentralized Finance) hacking.
This could indicate that DeFi protocols are improving their security practices, but metrics on stolen funds can be heavily outlier-driven, and one large hack could shift the trend.

Ransomware and Darknet Market Activity: A Mixed Picture

Ransomware Revenue: Has seen a disappointing increase in 2023 after declines in previous years.
Darknet Market Revenue: Is rebounding after a decline in 2022, driven by the shutdown of Hydra, which was once the world’s most dominant market. No single market has yet emerged to take Hydra’s place, but the sector as a whole is showing growth.

Transactions with sanctioned entities accounted for $14.9 billion worth of transaction volume in 2023, representing 61.5% of all illicit transaction volume measured by Chainalysis.
Most of this total is driven by cryptocurrency services that were sanctioned by the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) or are located in sanctioned jurisdictions.

Conclusion

The report highlights a complex and evolving landscape of cryptocurrency-based crime, with some trends pointing towards a decline in certain types of illicit activity while others show growth.