The Dark Side of Cryptocurrency: A Record High in 2024
Despite being a pivotal year for institutional adoption, 2024 has witnessed a staggering surge in illicit cryptocurrency activities. According to a comprehensive report by blockchain security firm Chainalysis, a whopping $40 billion has been funneled into addresses associated with illegal activities.
Estimated Figures and Future Projections
This $40 billion estimate is expected to rise throughout 2025 as further details surrounding historical criminal activities come to light. The illicit crypto transactions in question stem from various sources, including scams, malware, fraud, and activities on the dark web.
In comparison, the total figure for illicit activities in 2023 stood at $46.1 billion. However, Chainalysis anticipates that 2024’s total could exceed that amount, with a projected figure reaching $51.3 billion once all crimes are accounted for. It is important to note that these totals do not include revenues generated from non-crypto native crimes, such as drug trafficking or money laundering, where cryptocurrencies are merely used as a payment method.
Institutional Adoption vs. Illicit Activities
The approval of spot Bitcoin ETFs in 2024 has led to a significant influx of institutional volume in the crypto market. This institutional activity has contributed to a decrease in the ratio of illicit crypto transactions relative to the overall market volume. Specifically, illicit transactions now account for only 0.14% of all cryptocurrency transactions, a notable drop from 0.61% in 2023.
Shifting Trends in Illicit Transactions
Interestingly, the landscape of illicit transaction methods has evolved. Back in 2021, approximately 70% of all illicit transactions were conducted using Bitcoin (BTC). However, this trend has shifted dramatically; stablecoins now dominate the scene, making up 63% of illicit transactions, while Bitcoin accounts for only around 20%.
Additionally, privacy-focused cryptocurrency Monero (XMR) has gained prominence due to its widespread use in dark web markets. Altcoins collectively account for about 10% of all illicit transactions.
Looking Ahead: 2025 Predictions and Major Hacks
As we look forward to 2025, it is essential to consider that the figures may be impacted by significant events, such as the $1.5 billion hack of Bybit that occurred in February. This incident marks the largest single theft in cryptocurrency history and could skew the statistics, particularly concerning the inclusion of Ether (ETH) in future reports.
In summary, while 2024 has brought significant advancements in the cryptocurrency sector, it is crucial to remain vigilant about the ongoing challenges posed by illicit activities within this evolving landscape.
