Report by Chainalysis shows illicit cryptocurrency volume seeing an all-time high in 2022

Despite the market decline for cryptocurrencies, the volume of unlawful transactions increased for the second year in a row, reaching a record high of at least US$20.1 billion in 2022. According to Chainalysis, a blockchain data platform, the most recent annual Crypto Crime Report shows that sanctions-related transaction volume, which is primarily linked to Russian crypto exchanges, increased by over 10 million percent between 2021 and 2022, making up the majority (44%) of all illicit transaction volume in the previous year.

The crypto community can however find plenty of positives to take away from this latest report. Unlike in 2021, this year, transactions associated with traditional forms of crypto crime — scams, terrorism financing, and fraud shops — all showed year-on-year decreases. Only transaction volumes related to stolen funds rose 7% year on year, and even this represented a significantly decelerated rate of growth compared to the previous year when the corresponding increase was almost 6x.

Just 0.24% of the overall number of bitcoin transactions are related to unlawful behaviour, which is a generally encouragingly low percentage.

Kim Grauer, Director of Research, Chainalysis said “The events of 2022 have made clear that although blockchains are inherently transparent, the industry has room for improvement in this respect. There are opportunities to connect off-chain data on liabilities with on-chain data to provide better visibility, and the transparency of all transactions on-chain in DeFi is a standard that all crypto services should strive to achieve. As more and more value is transferred to the blockchain, all potential risks will become transparent, and we will have more complete visibility.”