Estimates suggest that illicit cryptocurrency activity could reach up to $51 billion in 2024, reflecting a significant rise compared to around $41 billion in the previous year, as per analysis from Chainalysis. This increase may be driven by historical trends and the continued identification of illicit addresses on the blockchain. While these figures indicate a growing volume of illicit activity, it is important to note that the proportion of illicit transactions relative to the overall crypto market has plummeted to its lowest level in three years.
In 2023, the illicit share of cryptocurrency transactions constituted just 0.14% of the total market size, a notable decline from 0.61% in 2022, and the lowest level recorded since 2021. The increase in overall crypto transactions, particularly influenced by advancements such as the rise of US exchange-traded funds and political developments, has contributed to this situation. The total market valuation peaked at over $3.9 trillion in mid-December 2024, showcasing a rebound from a downturn that began in late 2022.
Organized crime groups have increasingly turned to cryptocurrencies as a means to facilitate traditional illegal activities, including money laundering and trafficking of drugs, humans, and wildlife. In the prior year, nearly $11 billion of the illicit crypto volume was linked to various criminal activities, including hacking and scams, alongside services that support these crimes.
Despite a growing trend in illicit cryptocurrency usage, stablecoins have remained the preferred vehicle for moving illicit funds, comprising nearly two-thirds of the total illicit volumes. Moreover, stablecoins account for approximately 77% of the entire cryptocurrency market, indicating their dominance in both legal and illicit transactions alike.
