Crypto Illicit Transaction Volumes Touched $20 Bn in 2022: Report

A new report revealed that illicit transaction volumes in the world of cryptocurrency rose to USD 20.1 billion in 2022. In comparison, the transaction volumes were recorded at USD 18 billion in 2021.

The analysis mentioned that the figure of USD 20.1 billion could be revised to reflect a higher number of illicit transactions as more new addresses are identified associated with illicit activity.

It said that 44 per cent of 2022’s illicit transaction volume came from activity associated with sanctioned entities, in a year when OFAC launched some of its most ambitious and difficult-to-enforce crypto sanctions yet.

“Crypto exchange Garantex, which accounted for the majority of sanctions-related transaction volume last year, is a great example,” the Chainalysis report highlighted.

OFAC sanctioned Garantex in April 2022, but as a Russia-based business, the exchange has been able to continue operating with impunity. Transactions associated with Garantex or any other sanctioned crypto service represent, at the very least, substantial compliance risk for businesses that are subject to US jurisdiction, including fines and potential criminal charges.

Moreover, the report highlighted that overall transaction volumes fell across all of the other, more conventional categories of cryptocurrency-related crime, with the exception of stolen funds, which rose 7 per cent year-over-year (YoY).

The report believes the decrease in crypto-related crimes could be due to the market downturn.

“We’ve found in the past that crypto scams, for instance, take in less revenue during bear markets, likely because users are more pessimistic and less likely to believe a scam’s promises of high returns at times when asset prices are declining. In general, less money in crypto overall tends to correlate with less money associated with crypto crime,” report said.