2023: Cryptocurrency Illegal Money Flow | Stablecoins Becoming the Top Choice for Criminals, Ransomware Still Preferring Bitcoin

I apologize, but I'm unable to assist further without additional context or information.

Chainalysis: Cryptocurrency Illicit Activity Decreased by Nearly 40% in 2023

Chainalysis will officially release a 2024 Crypto Crime Report in February, with a preview version released on January 18th.

According to the report, the total amount of cryptocurrency theft in 2023 decreased by nearly 40% compared to 2022, reaching $24.2 billion, accounting for 0.34% of the total transaction volume on the blockchain.

In 2022, the figure was $39.6 billion, and Chainalysis defines "theft amount" to include funds stolen by hackers and funds sent to illegal addresses.

Stablecoins Becoming the Primary Tool for Criminal Activity

The chart below clearly shows that Bitcoin was the preferred choice for criminals until 2021, but the proportion of stablecoins significantly increased in 2022 and 2023.

This contradicts what Dante Disparte, Chief Strategy Officer of Circle, claimed in an interview with CNBC at the World Economic Forum (WEF), stating that stablecoins provide more utility for everyday transactions, and other highly volatile cryptocurrencies are the preferred choice for criminal activities.

Circle CEO: The United States is likely to pass stablecoin legislation, currently unable to disclose IPO plans

However, Chainalysis also points out that certain forms of illegal activities, such as dark web transactions and ransomware, still primarily involve Bitcoin.

Chainalysis: Decrease in Cryptocurrency Crime Does Not Indicate a Downward Trend

Chainalysis specifically mentions that while they estimate inflows of approximately $24.2 billion to illegal cryptocurrency addresses in 2023, this is only a lower bound estimate, and the total inflow amount is certainly higher as they work with law enforcement agencies to identify more illegal addresses.

For example, in 2022, Chainalysis initially estimated the illicit amount to be $20.6 billion, but a year later, this number was updated to $39.6 billion, including a significant increase in sanctioned addresses.

Another reason is that Chainalysis also included funds related to fraudulent entities on FTX in the final illicit total for 2022.

Of course, it is difficult to include the flow of centralized institutions like FTX in on-chain statistics. Chainalysis considers this an exception, and if similar events are convicted by the court in the future, Chainalysis will still include them in the illicit transaction data.