Bitcoin accounted for 19% of illicit crypto volume in 2022, down from 97% Bitcoin accounted for 19% of illicit crypto volume in 2022, down from 97%
The multi-chain ecosystem has prodded criminals to look beyond Bitcoin to launder their illicit crypto.
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Updated: Jun. 28, 2023 at 3:19 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Over the past six years, there has been a significant decline in Bitcoin‘s share in criminal crypto transactions, according to TRM Labs‘ Illicit Crypto Ecosystem report.
In 2016, Bitcoin accounted for 97% of illicit crypto volume. In 2022, the share fell to less than one-fifth or 19% of illegal crypto volume, the report noted.
Moreover, in 2016 two-thirds of crypto stolen from hacks were in the form of Bitcoin, while the share fell to 3% in 2022. In place of Bitcoin, Ethereum and Binance Smart Chain rose to prominence among hackers. Ethereum accounted for 68% of crypto hack volume, and Binance Smart Chain accounted for 19%.
Additionally, Bitcoin was the only cryptocurrency for terrorism financing in 2016. However, in 2022, assets on the Tron blockchain became a popular tool, accounting for 92% of crypto used for terrorist financing.
The data suggest that cybercriminals have taken a “qualitative leap away” from Bitcoin and are now exploring other blockchains and assets, the report noted. Crypto compliance and risk management firm TRM Labs said that criminals increasingly resort to chain-hopping or transferring assets from one blockchain to another to obfuscate the source and destination of their ill-gotten funds.
Crypto prices fell in 2022, but crime did not.
Crypto prices tanked significantly last year thanks to high-profile bankruptcies, including FTX. However, this price fall had “no meaningful impact on the dollar value of crypto-related crime,” the report noted.
TRM Labs identified and analyzed 40 different types of crypto crimes in its report. According to its estimates, victims lost around $7.8 billion to Ponzi or pyramid schemes last year. Another $2 billion worth of crypto was stolen through cross-chain attacks.
The report also indicated that approximately $1.49 billion was funneled into Darknet markets in 2022, with over 80% of these funds directed to Russian-language darknet markets.
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Monika Ghosh
In 2020, Monika immersed herself in crypto, maintaining skepticism yet firmly believing blockchain could address key issues like financial disparity and transparency. A book-lover, she's also a passionate food enthusiast.
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Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
TRM Labs
TRM Labs is a blockchain intelligence company that helps financial institutions, crypto businesses, and government agencies detect and investigate crypto-related financial crime and fraud.