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The majority of cryptocurrency transaction volume, roughly 99.6%, is used for legal purposes.
That's according to a new crypto crime report by blockchain analytics firm Chainalysis, which found that the total value of cryptocurrency sent to illicit addresses dropped to $24.2 billion in 2023 — down from $39.6 billion in 2022.
And the 2022 figure was inflated by $8.7 billion in FTX creditor claims, after the Sam Bankman-Fried-led startup collapsed.
In 2023, illicit cryptocurrency transactions accounted for just 0.34% of all cryptocurrency volume in 2023, down from 0.42% in 2022 and a significant decrease from 1.3% in 2019.
The findings are at odds with public statements made by prominent business leaders like JPMorgan Chase & Co. (NASDAQ:JPM) CEO Jamie Dimon, who recently testified before Congress about cryptocurrency being used for purposes like “sex trafficking, tax avoidance, anti-money laundering, terrorism financing."
Crypto enthusiasts, including Edward Snowden, clapped back and mocked Dimon for what they perceived as an alarmist take.
It's worth noting, however, that the Chainalysis figures do not include funds derived from non-crypto native crime, potential market manipulation or funds associated with crypto money laundering.
The report only includes funds stolen in crypto hacks and funds sent to addresses identified as illicit.
Read Also: Cryptocurrency Scandal: $20.1B In Illicit Transactions Exposed
Still, crypto-native crime pales in comparison to the financial industry at large. The latest Global Financial Crime Report by Nasdaq states that in 2023 more than an estimated $3.1 trillion in illicit funds circulated through the global financial system. Drug trafficking ($782.9 billion) and human trafficking ($346.7 billion) accounted for the maximum share while terrorist financing stood at $11.5 billion.
The Chainalysis report highlights that Bitcoin (CRYPTO: BTC) is still used in illicit transactions (i.e., activity carried out in the Dark Web), but the volume has been consistently falling for the past five years. It was the leading cryptocurrency used among cybercriminals until 2021 — mainly due to its high liquidity nature. But over the past two years, stablecoins have taken the spot and are now used for carrying out illicit transactions alongside their dominance in legitimate activities in the market. The use of Tether (CRYPTO: USDT) for organized crime is a testament to that.
Read Next: From Casinos To 'Slaves' - UN Report Details Tether's Role In Organized Crime
Image: Pixabay
