The amount of crypto stolen through scams last year was nearly a third less than in 2022, according to advance excerpts from a report by Chainalysis to be published in full in February. According to the blockchain analysis firm, illicit revenue in total was down more than 54%.

Stolen cryptocurrency, Chainalysis said, accounted for 0.34% of total on-chain transactions in 2023 and totaled $24.2 billion compared to 0.42%, or $39.6 billion in 2022. The total for 2023 included funds sent to addresses the firm identified as “illicit” and funds stolen in hacks.

Chainalysis noted that the 2022 amount was much higher due to including $8.7 billion in FTX creditor claims.

“In last year’s report, we said that we would hold off on including transaction volumes associated with FTX and other firms that collapsed that year under allegedly fraudulent circumstances in our illicit totals until legal processes played out,” the firm said.

On November 2, a jury of nine women and three men found FTX founder Sam Bankman-Fried guilty of seven fraud and conspiracy charges, which Chainalysis led to the inclusion of FTX.

A credit market on the Optimism Network was hacked in August, with cybercriminals making off with 4,323.6 ETH—around $7 million at the time. In October, Canadian authorities said citizens had lost over $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 laundering over $10 million in cryptocurrency. The trio faces 30 years in federal prison if convicted. That same month, Chainalysis reported that Tether froze $225 million in USDT linked to human trafficking in collaboration with the DOJ.

Chairalysis also highlighted that while Bitcoin remains the number one cryptocurrency, it’s no longer number one amongst scammers—who have instead turned to stablecoins.

“Through 2021, Bitcoin reigned supreme as the cryptocurrency of choice among cybercriminals, likely due to its high liquidity,” Chainalysis said. “But that’s changed over the last two years, with stablecoins now accounting for the majority of all illicit transaction volume,” the firm said, adding that stablecoin dominance isn’t the case for all forms of cryptocurrency-based crime.

Chainalysis said that while the amount of cryptocurrency stolen was down, criminal activity, including ransomware and darknet market activities, saw significant revenue increases compared to the previous year.

Massachusetts Senator Elizabeth Warren, a longtime critic of cryptocurrency, has called for federal regulators to do more to crack down on illegal activity using digital currency. In December, Warren said cryptocurrency lobbyists were “undermining” the fight to stop cryptocurrency from financing terrorism.

“I write regarding a troubling new report that your association and other crypto interests are ‘flexing a not-so secret weapon: a small army of former defense, national security, and law enforcement officials’ to work on your behalf to undermine bipartisan efforts in Congress and the Biden Administration to address the role of cryptocurrency in financing Hamas and other terrorist organizations,” 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 growth in cross-border trafficking of synthetic drugs and other commodities, but the landscape has changed,” Regional Representative Southeast Asia and the Pacific Jeremy Douglas said in the UN’s report. “Major transnational organized crime groups have embraced technology and revolutionized the crime environment in the region.”

Edited by Ryan Ozawa.

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• Source: https://decrypt.co/213470/crypto-crime-down-29-percent-in-2023-chainalysis-report