Crypto crime value likely hit a high of $56 billion in 2024, says report
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The total value of cryptocurrencies sent to illicit addresses in 2024 is expected to hit a high of US$51 billion over time.
PHOTO ILLUSTRATION: PIXABAY
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SINGAPORE - The value of cryptocurrency that was sent to illegal digital addresses in 2024 is likely to surpass 2023 numbers, a Chainalysis report said.
The American blockchain analytics firm said in its 2025 crypto crime report released on Jan 15 that US$40.9 billion (S$56 billion) in cryptocurrencies was received by illicit addresses in 2024 based on its findings, lower than the US$46.1 billion in 2023.
But, as it continues to find more data throughout 2025, the firm estimates that the total value in 2024 could hit a high of US$51 billion.
Between 2020 and 2024, the total amount of cryptocurrencies that went to illicit addresses peaked at US$54.3 billion in 2022, which factored in FTX creditor claims.
American exchange FTX filed for bankruptcy protection in late 2022
Said Chainalysis: “A year from now, these totals will be higher, as we identify more illicit addresses and incorporate their historic activity into our estimates.”
For instance, in the 2024 report, the firm pegged the total value at US$24.2 billion for 2023, but later revised this to US$46.1 billion.
In general, the total value in crypto crime excludes revenue from non-crypto-native crime, such as traditional drug trafficking, and other crimes in which crypto may be used as a means of payment or laundering.
The report said that as cryptocurrency becomes more mainstream, illegal activity on the main blockchain network, or on-chain, is now used to fund and facilitate threats to national security and consumer protection, as opposed to cybercrime previously.
“As cryptocurrency has gained greater acceptance, illicit on-chain activity, too, has become more varied. For example, some illicit actors primarily operate off-chain, but move funds on-chain for laundering,” the report noted.
Chainalysis said its estimate for the share of illegal activity associated with crypto transactions on-chain fell to 0.14 per cent in 2024, from 0.61 per cent in 2023.
It added that it expects this share to rise over time, although historically these rates have consistently remained below 1 per cent.
Through 2021, Bitcoin was the crypto of choice among cyber criminals, likely due to its high liquidity, said the firm.
But there has since been a steady diversification away from Bitcoin, with stablecoins now accounting for 63 per cent of all illicit transaction volume. Stablecoins are a type of cryptocurrency that have their values pegged, or tied, to that of another currency, commodity or financial instrument.
This is tied to the trend that stablecoin activity soared 77 per cent year on year in 2024.
Transactions associated with sanctioned entities have shifted primarily to stablecoins due to challenges in accessing the US dollar through traditional means.
The report said ransomware and darknet market sales remain Bitcoin-dominated, while scamming or laundering of stolen funds spans across all asset types.
It found that stolen funds and scams are still prolific.
Stolen funds, for instance, rose by about 21 per cent year on year to US$2.2 billion.
Although the largest share of stolen funds was robbed from decentralised finance (DeFi) services, centralised services were the most targeted in the second and third quarters, the report said. DeFi is a financial system that allows people, businesses or entities to conduct direct transactions on the blockchain network through the use of cryptocurrencies, without middlemen.
The report said high- and low-tech fraud and scams were prolific in 2024, with high-yield investment scams and pig butchering representing the most successful fraud and scam types. Pig butchering is a type of scam in which victims are tricked into giving more and more money to a seemingly sound investment until the scammer disappears with the funds.
Chainalysis also noted that there is a rise in the use of artificial intelligence in the fraud and scams space.
Ransomware has continued to see revenues in the hundreds of millions of dollars, the report said, adding that multilateral law enforcement disruptions, coupled with less victim appetite to pay ransoms, have dented the ecosystem.
Darknet markets received US$2 billion in 2024, down from the nearly US$2.3 billion in 2023, while fraud shop volume is down by slightly more than half to US$220.1 million.
