According to the latest report from blockchain research firm Chainalysis, crypto crime hit a staggering high of $20.6 billion worth of blockchain transactions in 2022. Kim Grauer, head of research at the company, stated on CoinDesk TV’s “First Mover” that while other forms of illegal activity may have decreased during this period, two categories particularly increased: sanctioned activities and hacking.
“Regulators Attack the Entire Cryptocurrency Instead of Focusing on Bad Actors”
According to a recent Chainalysis report, transactions involved in crypto crime on the blockchain only comprised 0.24% of all transactions in 2020 – an increase from 0.12% the year prior. However, crypto crime is still “relatively small” compared to the total volume, which is less than 1%.
Grauer declared that when the U.S. Treasury’s Office of Foreign Assets Control (OFAC) commenced to actively target crypto platforms as a whole rather than single out bad actors’ specific crypto addresses in 2021, their findings revealed that most crypto crime activity occurring in 2022 was generated from funds channeled into Garantex and other services like it post-designation.
Garantex, a Russian-based crypto exchange, is still going strong despite the US sanctions that were imposed in April, as reported by OFAC. The platform had accumulated an impressive $1.3 billion from October alone. Though OFAC has put considerable effort into limiting crypto crime on other platforms such as Hydra’s darknet market and Tornado Cash decentralized mixing service, their success largely depends upon the type of entity sanctioned and if users in that jurisdiction pay any heed or attention to it at all.
North Korea Is Like a Crypto Criminals Center
According to Chainalysis, North Korean cyber criminals managed to steal a whopping $1.6 billion worth of funds in 2022 – an all-time high for the organization. Grauer believes that these hackers specifically targeted and exploited weaknesses within decentralized finance (DeFi) protocols. In fact, during 2022 alone, DeFi protocols were robbed of over $3.8 billion in crypto assets – almost double the amount stolen from them just one year prior!
Grauer warned that if we don’t act to reduce the number of crypto crimes, it will lead to a lack of trust in our system.
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