Bitcoin’s Role in Crypto-Currency Crime Plummets by 67% Over the Past 5 Years

Bitcoin has long been associated with the dark underbelly of the digital world, serving as the preferred currency for cybercriminals and illicit activities. However, recent data suggests Bitcoin is seeing relief as its involvement in crypto crime falls. According to Stocklytics.com, Bitcoin’s role in crypto crime has dropped by 67% in the last five years.

The site’s financial analyst, Edith Reads, comments,

Historically, Bitcoin earned a reputation for facilitating illicit transactions, including money laundering, ransom payments, and purchasing goods and services on the dark web. Its unique characteristics, being pseudo-anonymous and decentralized, appealed to those desiring transactions beyond the control of institutions. However, a close examination of current trends reveals a changing landscape within the cryptocurrency realm regarding Bitcoin’s role in facilitating illicit activities.

Stocklytics Financial Analyst Edith Reads

Evolution and Transparency of Bitcoin

In 2023, cybercriminals retained $24.2 billion in crypto assets, constituting 0.34% of the overall on-chain transaction volume. This marked a significant decrease from the 2022 figure of $39.6 billion, representing 0.42% of the total on-chain transaction volume.

Bitcoin’s involvement came to a cumulative close of nearly 25% of all illegal crypto activity, while stablecoins represented more than 60%. Over time, Bitcoin has undergone changes that have played a role in decreasing its association with criminal actions. In collaboration with developers, the community of cryptocurrency enthusiasts has dedicated efforts to enhance the visibility and traceability of Bitcoin transactions.

Improved analytical tools and blockchain have empowered law enforcement agencies to effectively monitor and capture individuals engaged in unlawful activities utilizing Bitcoin.

The Rising Threat To the Crypto Space

The prevalence of ransomware and darknet activities is causing anxiety among cryptocurrency owners, given the notably high number of cases. Of particular concern within the crypto community is the impact of ransomware attacks, which witnessed a substantial decrease in 2022. In the past year, ransomware attackers generated approximately $457 million, marking a significant decline of $309 million from the peak in 2021.

By July 12, 2023, ransomware attackers had already made way with over $175.8 million more than they had in July 2022, hinting at the aggressive attacks being a potential danger even in the future.

The darknet marker also spiraled in 2023 after a substantial fall in 2022. While Hydra‘s activities hit a snag in 2022, the darknet market is quickly rebounding, posing significant risks to unsuspecting crypto owners.

Transactions with sanctioned entities also saw a significant rise in 2023, with about $15 billion lost. Almost 62% of the total illicit transaction volume was received by illegal crypto addresses in 2023.

While crypto scams are dwindling, there’s new cause for alarm, especially with ransomware and darknet activity escalating. Small-scale scams involving the use of coercion and romantic entanglements are also on the rise. The crypto community needs to remain vigilant and protect their assets and those of their wallet owners. 

However, the positive results Bitcoin is seeing signals that the crypto industry is reshaping in the interests of improved crypto security and reliability.