Crypto crime continues to grow, evolve: report

However, the firm said that this estimate will surely rise as more illicit crypto addresses are identified — as a result, it suggested that the final tally for 2024 will likely top $51 billion.

Indeed, the firm’s initial report on 2023 estimated crypto crime at $24.2 billion, but that preliminary estimate almost doubled as more data became available.

Alongside its estimates of illicit activity, Chainalysis also examines underlying trends in crypto crime — reporting that stablecoins now account for 63% of all illicit transactions, replacing Bitcoin as the favoured digital asset for criminal actors.

“Through 2021, Bitcoin was unequivocally the cryptocurrency of choice among cybercriminals, likely due to its high liquidity. Since then, however, we have observed a steady diversification away from Bitcoin, with stablecoins now occupying the majority of all illicit transaction volume,” it noted.

The increased use of stablecoins in illegal activity tracks the growth in this segment of the crypto market, it said, noting that stablecoin activity was up about 77% year-over-year in 2024.

In particular, transactions involving entities that are subject to financial sanctions have largely shifted to stablecoins, the report said.

“Individuals operating in sanctioned jurisdictions, often have a greater incentive to use stablecoins due to challenges otherwise accessing the U.S. dollar through traditional means amid a desire to benefit from its stability,” it said.

Meanwhile, other forms of crypto crime, such as ransomware and criminal activities on darknet markets, continue to primarily use Bitcoin, the report noted.

While the volume of ransomware attacks remained high 2024, the firm said that successful efforts by law enforcement to disrupt these kinds of attacks, coupled with a declining willingness of victims to pay ransoms, has made this sort of activity less lucrative.

It estimated that the value of ransomware payments dropped 35% last year, and that less than half of recorded ransomware incidents resulted in payments to criminals.

Despite the decline in ransomware, Chainalysis said that crypto theft continued to grow. It estimated that the total value of funds stolen in 2024 rose by approximately 21% year-over-year to $2.2 billion.

“Although the largest share of stolen funds was robbed from decentralized finance (DeFi) services, centralized services were the most targeted in Q2 and Q3,” the report said — adding that 61% of crypto theft was perpetrated by North Korean hackers.

Frauds and scams remained prolific in 2024 too, it said, “with high-yield investment scams and pig butchering representing the most successful fraud and scam types.”

These kinds of scammers are increasingly using AI tools to carry out their crimes, the report said.

“This use of AI is consistent with a broader trend across a range of illicit cybercrimes, as services have emerged that leverage AI to bypass know-your-customer (KYC) requirements,” it said.

The firm also reported that the perpetrators of crypto crime are becoming increasingly diverse and professional.

According to the report, so-called “illicit actors” — including criminals that carry out illegal activities, such as hacking, scams and extortion, and those that provide these kinds of activities as a service to others — accounted for $10.8 billion of the estimated $40.9 billion worth of crypto crime that took place in 2024.

“An array of illicit actors, including transnational organized crime groups, are increasingly leveraging cryptocurrency for traditional crime types, such as drug trafficking, gambling, intellectual property theft, money laundering, human and wildlife trafficking, and violent crime,” it said.