Crypto crime accounted for a record-setting $20.6 billion worth of blockchain transactions in 2022, according to a new report from blockchain research firm Chainalysis. While other forms of illicit activity may have trended down, “there were two categories that really stood out in terms of their growth, and that’s sanctioned activity and hacking,” Kim Grauer, head of research at the firm, said Monday on CoinDesk TV’s “First Mover.” According to the Chainalysis report, criminal activity accounted for 0.24% of all blockchain transactions last year – an increase from the year before of 0.12%. However, crypto crime is “a small share of total volume at less than 1%,” the report found. Grauer said that after the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) began to crack down on crypto platforms in 2021 rather than singling out crypto addresses of specific bad actors, all transactions done by the platforms that were said to facilitate crimes were counted. With this new categorization, Chainalysis found a majority of the sanctioned activity in 2022 came from funds “flowing to Garantex or other services like that after the designations occurred.” Garantex is a Russian-based crypto exchange that continues to operate. The exchange had $1.3 billion in inflows through October, following its sanctioning in April, the report found. When OFAC tried to limit illicit activity on other crypto-based platforms, such Hydra’s darknet market and decentralized mixing service Tornado Cash, the agency’s efforts varied, Grauer said. Its success often depends on the type of entity OFAC is sanctioning and whether users in that jurisdiction care about the sanctions imposed on the platform.
Full report : Crypto Crime Hit All-Time High of $20.6B in 2022: Chainalysis.
Looking at past and present crypto hacks, OODA has been compiling a comprehensive Web3 incident database based on our research to categorize what compromises are taking place as well as document the root causes that plague Cryptos, DeFi, NFTs, and Web3 in general. Tracking root causes provides comprehensive insights into how innovators can create robust cyber risk management approaches and reduce the potential for consequential attacks. You can access the OODA comprehensive Crypto Incident tracker here.
