Following Sam Bankman-Fried’s conviction, FTX reported a significant increase in the amount of illicit cryptocurrency.
The amount of cryptocurrency stolen through scams last year was nearly a third less than in 2022, according to an advance excerpt from a Chainalysis report that will be published in full in February. The total amount of illicit proceeds fell by more than 54%, according to the blockchain analytics firm.
Chainalysis said stolen crypto accounted for 0.34% of total on-chain transactions in 2023, totaling $24.2 billion, compared to 0.42%, or $39.6 billion, in 2022. The 2023 total includes funds sent to entities deemed “illegal” by the company and funds stolen by hackers.
Chainalysis notes that the 2022 amount is much higher because it includes $8.7 billion in FTX creditor claims.
“In last year’s report, we indicated that we would hold off on including volume associated with FTX and other firms that collapsed that year due to alleged fraud in our illicit totals until the legal process was concluded,” the company said.
On November 2, a jury of nine women and three men found FTX founder Sam Bankman-Fried guilty of seven counts of fraud and conspiracy, leading Chainalysis to include FTX in the case.
In August, a credit market on the Optimism Network was hacked, with cybercriminals making off with 4,323.6 ETH (about $7 million at the time), and in October, Canadian authorities said citizens had lost more than $22.5 million in scams involving cryptocurrencies.
In November, the U.S. Department of Justice charged Zhong Shi Gao, Naifeng Xu, and Fei Jiang with money laundering of more than $10 million. If convicted, the three face 30 years in federal prison. In the same month, Chainalysis reported that Tether worked with the Department of Justice to freeze $225 million in USDT related to human trafficking.
Chainalysis also highlighted that while Bitcoin remains the top-ranked cryptocurrency, it is no longer number one among scammers, with a shift towards stablecoins.
"Throughout 2021, Bitcoin has remained the cryptocurrency of choice for cybercriminals, likely due to its high liquidity," Chainalysis said. "But this has changed over the past two years, with stablecoins now accounting for the majority of all illicit transaction volume," the firm said, adding that the dominance of stablecoins does not apply to all forms of cryptocurrency-based crime.
Chainalysis said that while the amount of stolen cryptocurrency declined, revenue from criminal activity, including ransomware and dark web market activity, increased significantly compared to the previous year.
Massachusetts Sen. Elizabeth Warren, a longtime cryptocurrency critic, has called on federal regulators to do more to combat illegal activity using digital currencies. In December, Warren said cryptocurrency lobbyists were “undermining” the fight to stop cryptocurrencies from funding terrorism.
“I am writing this in response to a troubling new report that alleges your association and other cryptocurrency interests are ‘unveiling a not-so-secret weapon: a small army of former defense, national security, and law enforcement officials’ working on your behalf to undermine bipartisan efforts by Congress and the Biden Administration to address the role of cryptocurrency in funding Hamas and other terrorist groups,” Warren wrote in a letter to the Blockchain Association.
On Tuesday, the United Nations Office on Drugs and Crime (UNODC) reported a rise in money laundering using online casinos in East and Southeast Asia.
"Transnational organized crime in Southeast Asia has evolved rapidly in recent years. This change was first and most profoundly marked by the growth of cross-border trafficking of synthetic drugs and other commodities, but the landscape has changed," Jeremy Douglas, regional representative for Southeast Asia and the Pacific, said in the UN report. "Major transnational organized crime groups have adopted encryption technology and have completely transformed the criminal environment in the region." #Chainalysis #加密货币犯罪
