Stablecoins took over the majority of all illicit transaction volume in 2022 and 2023 as cybercriminals sought out other ways to transact apart from using Bitcoin (BTC). 

In its latest report on crypto crime, blockchain analytics firm Chainalysis highlights that from 2018 to 2021, Bitcoin dominated as the “cryptocurrency of choice” among criminals. However, stablecoins accounted for most of the illicit transaction volume in 2022 and 2023. 

Illicit transaction volume by asset type from 2018 to 2023. Source: Chainalysis 

The report notes that the change comes alongside the growth in overall activity around stablecoins, including legitimate transactions. Despite the development, other types of criminal activities, such as darknet market sales and ransomware extortion, still mostly use BTC. 

However, cybercriminals increasingly prefer stablecoins for activities like scamming and transactions linked to sanctioned entities, which are the biggest forms of crypto crime in terms of transaction volume. Chainalysis wrote:

“Sanctioned entities and jurisdictions together accounted for a combined $14.9 billion worth of transaction volume in 2023, which represents 61.5% of all illicit transaction volume we measured on the year.”

The report highlights that most of this amount is driven by crypto services sanctioned by the United States Department of the Treasury’s Office of Foreign Assets Control, which continue to operate out of locations where U.S. sanctions are not enforced. 

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On Jan. 4, blockchain security firm CertiK reported that crypto hack revenue declined by over 51% in 2023. This marked a “positive development” in blockchain security, according to CertiK co-founder Ronghui Gu.

Chainalysis shared somewhat similar figures in its report, highlighting that crypto hack revenue fell by 54.3%, while crypto scam profits dropped by 29.2%. Because of this, the records show that there’s also a drop in transaction volume associated with illicit addresses in 2023. 

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