Crypto crime proceeds valued at $40.1 billion in 2024—Chainalysis

Blockchain analytics firm Chainalysis has said that in 2024, illegal cryptocurrency activities worldwide amounted to $40.1 billion, or 0.14% of the total global on-chain value.

While this may appear to be a drop from the $46.1 billion recorded in 2023, the firm expects the figures to rise as it updates its reporting for the year. 

Of note: Chainalysis typically reports lower-bound estimates of illicit transaction volumes at the start of the year.

• According to the firm, identifying these illegal activities is a continuous process, and it constantly gathers new information about illicit addresses from different sources. 

Additionally, some crypto transactions may initially seem harmless until law enforcement uncovers related illegal activities that occur off-chain, with the proceeds ultimately settled on-chain.

• Once identified, these transactions are classified as illicit and included in the total volume of crypto-related crime.

Case in point: The initial estimates for 2023 were $24.2 billion, but the figures have since been updated to $46.1 billion. 

What counts as crypto crime? 

• Chainalysis defines illicit activities as transactions involving funds sent to addresses confirmed or suspected to be engaged in unlawful activities, as well as cryptocurrencies obtained through hacks.
• The firm also observed that the landscape of crypto crime has grown more diverse, organized, and professionalized.
• Increasingly, off-chain criminal entities—including drug trafficking rings, intellectual property thieves, money launderers, and human traffickers—are leveraging crypto to facilitate their illicit activities, Chainalysis notes.
• Of the $40.9 billion in crypto value deemed illicit, Chainalysis data states that $10.8 billion (26.4%) was received by these elements it has tagged ‘illicit-actor org.’ 

Marketplaces enabling crime

• The report also emphasized the role of online marketplaces like Huione Guarantee in advancing the sophistication of crypto crime by offering infrastructure enabling seamless scam technology sales. 
• Firms such as Huione have also helped process on-chain transactions for scams, stolen funds, fraud shops, and the sale of child sexual abuse materials, among others. 

AI in crypto crime

• In addition, more illegal actors committing crypto crimes have been leveraging artificial intelligence to bypass know-your-customer requirements and seal sextortion scams. 

Stablecoin theft

• Stablecoins dominated criminal crypto activity for the third year in a row, accounting for 63% of all illicit transactions. 

• This is in tandem with a broader ecosystem shift towards fiat-pegged stablecoins, which are relatively stable and provide back-door access to not-readily-accessible fiat currencies, especially for sanctioned entities. 
• However, some illegal activities, such as the sale of ransomware and darknet materials, remain almost exclusively denominated in bitcoin. 

DeFi hacks

• The amount of stolen funds increased by 21% year over year to $2.2 billion, with the largest share robbed from decentralized finance (DeFi) services. 
• Chainalysis suggested that stolen funds from DeFi hacks dropped in 2024, possibly indicating that DeFi protocols had improved their security measures. 
• However, an increase in funds stolen from deFi services in its latest report points otherwise. 

Zoom out

• Centralized exchanges were not left out as well, with theft through the compromise of private keys representing 43.8% of stolen crypto in 2024. 
• According to Chainalysis, North Korean hackers stole a record-breaking $11.34 billion from crypto platforms in 2024, marking their highest theft to date.