Crypto crime hit record high of $20bn in 2022, report claims

12 Jan 2023

Image: © Andrey/

The report stressed that the record figure is a ‘lower bound estimate’ and the collapses of several large firms such as FTX and Celsius were not included.

Illicit cryptocurrency transactions rose for the second year in a row reaching $20.1bn in 2022, according to a new report by Chainalysis.

The blockchain analysis company said the level of illegal activity rose despite a downturn in the market following the closure of certain companies such as crypto lender Voyager and the controversial FTX collapse.

Despite the downturn, the new level of illegal activity is the highest on record, Chainalysis claims. The report said 44pc of the illicit transactions came from activity associated with sanctioned entities.

The company noted that organisations such as the US Office of Foreign Assets Control (OFAC) launched ambitious new sanctions in 2022.

Chainalysis said the office sanctioned a “relatively even mix” of individuals and various entities last year, citing activity such as cybercrime, drug trafficking and participating in Russia’s invasion of Ukraine.

For example, the Russian crypto exchange Garantex accounted for the majority of sanctions-related transaction volume last year, according to the report.

“This diversity of entities represents a huge change compared to OFAC’s pre-2021 designations, which were all against individuals and, at the blockchain level, comprised of only a relatively small number of personal wallets,” the company said in a blog post.

Other authorities began sanctions that impacted the crypto sector amid the invasion of Ukraine. In April, the EU’s fifth round of sanctions on Russia included a ban on providing high-value crypto services in a bid to close potential loopholes.

Cryptocurrency exchange Binance limited services for Russian users the same month in order to comply with these EU sanctions.

The volume of stolen cryptocurrency rose by 7pc last year, while other forms of illegal crypto transactions such as scams and ransomware saw volumes decline last year.

The record figure is only an estimate and could change, as Chainalysis said it only contains “on-chain intelligence” and doesn’t account for off-chain bookkeeping.

The report also doesn’t include the transaction volumes of several large firms that collapsed last year, including FTX, Celsius and Three Arrows Capital. The company said the bankruptcy and criminal cases associated with these collapses are “still ongoing”.

“We have to stress that this is a lower bound estimate – our measure of illicit transaction volume is sure to grow over time as we identify new addresses associated with illicit activity,” Chainalysis said.

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Leigh Mc Gowran is a journalist with Silicon Republic