Crypto Crime Surge: $51B in 2024, Stablecoins Lead

Crypto crime has reached an unprecedented level in 2024, with total illegal activity surpassing $40 billion, according to a recent report by Chainalysis. The firm estimates that this figure could rise to over $51.3 billion as more data becomes available, indicating that 2024 could be a record year for crypto-related criminal activity.

The shift in preference among cybercriminals from Bitcoin to stablecoins is a notable trend in the report. In 2021, Bitcoin accounted for approximately 70% of illegal cryptocurrency activity. However, stablecoins have since taken the lead, with a 63% share of unlawful transaction value, while Bitcoin's share has fallen to just 20%. The increasing attractiveness of stablecoins to criminals can be attributed to their safety and widespread acceptance, making them an ideal choice for money laundering.

Chainalysis examined various illegal activities, including fraud, scams, and ransomware attacks. While the illicit transaction volume for 2024 is only $6.1 billion behind the record set in 2023, the percentage of all cryptocurrency transactions with illicit activity has significantly declined. In 2024, illicit trades constitute just 0.14% of total crypto volume, compared to 0.61% in the previous year. This decrease indicates that the overall crypto market is becoming more legitimate and that regulatory measures are effectively suppressing criminal activity.

Other anonymity-focused cryptocurrencies, such as Monero (XMR), are also gaining popularity among cybercrime perpetrators and dark web traders seeking to evade detection. Approximately 10% of criminal transactions involve other cryptocurrencies (altcoins), demonstrating the diversification of criminal activity within the crypto asset category.

Despite the persistence of illicit activity in the cryptosphere, the volume of honest transactions has expanded exponentially due to institutional investment. The launch of Bitcoin and Ethereum spot exchange-traded funds (ETFs) and increased Wall Street engagement have contributed to the growth of legal trading activity. As cryptocurrency becomes more mainstream and widely accepted, the proportion of illicit transactions to legitimate transactions decreases, signaling a more mature and regulated digital asset marketplace.

The increase in criminal crypto transactions highlights the ongoing challenges of crypto security and regulation. However, the decreasing ratio of criminal activity to overall market activity suggests