Illicit cryptocurrency transactions have skyrocketed to an estimated $51 billion in 2024, according to the blockchain analytics firm Chainalysis. Despite this surge, illicit crypto activities now make up only 0.14% of the total market, which is the lowest share in three years.
In comparison, the share of illicit crypto activities was 0.61% in 2023, nearing the record low of 0.12% in 2021. Chainalysis noted that the 2024 figure is likely a conservative estimate due to ongoing investigations that may reveal more illicit activities and addresses.
“2024 was likely a record year for inflows to illicit actors,” stated Chainalysis in a blog post on January 15, indicating that historical trends suggest these numbers could rise as more data becomes accessible.
ETFs And Trump's Election Spark Renewed Optimism
The wider cryptocurrency market saw a revival in 2024, aided by positive events like U.S. exchange-traded funds and renewed interest following Donald Trump's election. The market’s overall value peaked at $3.9 trillion in December, leading to greater use of digital currencies.
Transnational organized crime groups benefitted significantly from illicit crypto activities, utilizing digital currencies for crimes such as money laundering and drug trafficking. Of the $40.9 billion identified in illicit crypto volume in 2023, $11 billion was associated with hacking, scams, extortion, and trafficking.
Stablecoins emerged as the favored method for moving illicit funds, constituting nearly two-thirds of such transactions. However, they also represent around 77% of the total transaction volume in the broader crypto market.
While the decline in illicit transaction shares is a positive trend, experts warn that these rates might increase with new data. Historically, illicit crypto use has consistently remained below 1%, highlighting the ongoing challenges in tackling financial crime in the sector.
Web3 Workers Targeted By Malware Campaign
Last month, Cado Security Labs alerted that Web3 professionals are now targets of a sophisticated malware campaign utilizing fake meeting apps to harvest sensitive information and crypto assets. In a report, Tara Gould, Cado’s threat research lead, explained that scammers are using artificial intelligence to create convincing replicas of legitimate companies' websites and social media profiles.
Once installed, the malicious app known as “Meetio” functions alongside various domains to extract critical data including Telegram credentials, banking information, and cryptocurrency wallet details. These types of schemes have been on the rise, with investigations revealing a connection to hacker groups from North Korea targeting crypto firms and DeFi projects with disguised malware job offers.
