Despite The Market Collapse, Illegal Cryptocurrency Transactions Reached A Record Level

According to the blockchain data platform, Chainalysis, the number of illicit cryptocurrency transactions increased consecutively for the second year, surpassing a record-breaking $20.1 billion.

The cryptocurrency sector was severely shaken the prior year, with numerous large companies like TerraLabs, Celsius, Three Arrows Capital, FTX, and others, approaching downfall and others being convicted of deception that would have brought back the overall industry. Regardless of the current bear market or we can say “crypto winter” which means a protracted era of low and declining values, market data reveals that illicit cryptocurrency transactions reached record-high levels in 2022.

Data suggests that circumventing sanctions was the main purpose of using virtual currencies illegally. Scamming gains made up the second-largest portion of transaction volume. Illicit coin usage also includes transactions involving plundered money and hidden web markets.

The usage of cryptocurrencies to circumvent penalties has grown significantly in recent years, with transaction volume growing by 10,012,224.34% and accounting for 44% of all unlawful withdrawals. The tight sanctions that the US and EU imposed on Iran and Russia are to blame for the dramatic rise in the use of crypto by nation-states.

Every crime related to cryptocurrency saw a decline in transaction volume, except theft money, which saw a 7% increment. The state of the market could be a significant element. A former Chainalysis study revealed that during recessions, consumers are less prone to fall victim to cryptocurrency-related fraud. Because of this, the amount of money made through this illegal practice has decreased.

Considering the rise in illegal transactions, the net percentage of bitcoin transactions used in crime remains modest, at less than 1%.

Read next: Over $3.5 Billion in Crypto Was Stolen Through Hacks in 2022
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