Surge in Crypto Crime Despite Institutional Adoption in 2024
In 2024, the landscape of cryptocurrency was marked by a significant increase in illicit activities, even as the year also saw a landmark surge in institutional adoption. According to a comprehensive report by the blockchain security firm Chainalysis, an astounding $40 billion was funneled into illicit addresses. This figure is expected to rise as more details surrounding historical crimes come to light, with projections indicating that the total for 2024 could reach approximately $51.3 billion. It’s important to note that this total does not account for revenue stemming from non-crypto-native crimes, such as drug trafficking or money laundering, where cryptocurrencies are merely utilized as a payment method.
In 2023, the reported figure for illicit crypto transactions stood at $46.1 billion. However, Chainalysis anticipates that the 2024 total will surpass this, reflecting a concerning trend. The approval of spot Bitcoin ETFs in 2024 catalyzed a substantial influx of institutional volume, which, in turn, reduced the ratio of crypto crime relative to overall industry transactions. Specifically, illicit transactions accounted for just 0.14% of all crypto transactions in 2024, a significant decrease from 0.61% in 2023.
Furthermore, the behaviors of criminals have evolved when it comes to transferring illicit funds. In 2021, approximately 70% of all illicit transactions were conducted using Bitcoin (BTC). However, this trend has dramatically shifted, with stablecoins now dominating the landscape. Presently, BTC comprises only about 20% of all illicit transactions, while stablecoins represent the majority at around 63%. Additionally, privacy-focused coin Monero (XMR) remains a significant player, particularly noted for its use in dark net markets. Altcoins collectively account for roughly 10% of all illicit transactions.
As we look ahead to 2025, it’s crucial to consider that the figures may be influenced by notable events, including the massive $1.5 billion hack on Bybit in February, which stands as the largest single crypto theft to date. This incident may skew the data to include Ether (ETH) in the illicit transaction statistics.
