The Rise and Fall of Illicit Crypto Transactions in 2023

The Rise and Fall of Illicit Crypto Transactions in 2023

In 2023, the world of cryptocurrency saw a significant decrease in illicit transactions, with data from TRM Labs showing a drop of $14.7 billion from the previous year. Despite the overall decrease, TRON blockchain stood out as the host of 45% of all crypto frauds in 2023, which is a 4% increase from the previous year.

The latest report from TRM’s blockchain intelligence team sheds light on the key trends observed in crypto illicit transactions through 2023. Criminals managed to handle over $34 billion worth of cryptocurrencies, showcasing a 9% decrease in total illicit funds from 2022 to 2023. Notably, the TRON blockchain emerged as the primary platform for illicit activities, accounting for almost half of all illicit crypto volume at 45%.

When questioned about the reasons behind TRON blockchain’s appeal to perpetrators, Angela Ang, a senior policy advisor at TRM, pointed out that the platform’s low transaction fees and high speed make it an attractive option for money laundering. Additionally, the availability of stablecoins like USDT on TRON further facilitates illicit activities, with USDT being identified as the currency of choice for terrorist financing entities.

Despite the prominence of TRON blockchain in illicit transactions, 2023 witnessed a notable decrease in overall illicit funds. This decline was primarily driven by a 30% reduction in crypto value linked to sanctioned entities, dropping from $25.4 billion in 2022 to $16.2 billion in 2023. Furthermore, crypto hacks and exploits experienced a significant 50% decrease, with only $1.8 billion compromised in 2023 compared to $3.7 billion in 2022. On average, each hack in 2023 resulted in $10 million being compromised, a sharp decline from $21 million in 2022.

Overall, the crypto landscape in 2023 displayed a mix of highs and lows, with a noticeable decline in illicit transactions despite certain platforms like TRON blockchain being at the center of illicit activities. As the industry continues to evolve, it becomes crucial for regulators and blockchain platforms to collaborate in order to curb illicit activities and ensure the integrity of the cryptocurrency ecosystem.


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