A recent study by the blockchain forensics company TRM Labs in San Francisco found that illegal cryptocurrency funds dropped significantly in 2023. Even with this drop, bad people could still handle a large amount of money—more than $34 billion.
The results show that illegal coin activity has decreased significantly. From $49.5 billion in 2022 to $34.8 billion in 2023, the amount dropped by almost one-third. This drop exceeded the 22% drop in the total number of coin transactions during the same period.
TRM Labs Highlights Decrease in Funds Sent to Banned Addresses
TRM Labs pointed out that the total value of funds sent to banned addresses and organizations also went down along with the general drop. The drop was caused by more government and law enforcement pressure, going from $25.4 billion in 2022 to $16.2 billion in 2023.
The report stressed that in 2023, sanctions against crypto-related companies and people will get much worse. Of the 33 names OFAC gave out this year, 12 ransomware groups, 6 high-risk exchanges, and a bitcoin mixing service stood out.
TRM Labs did notice that the sale of illegal drugs on darknet marketplaces stayed strong, even though total illegal crypto activity was going down. These trades increased from $1.3 billion in 2022 to $1.6 billion in 2023, showing that the general drop in crypto crime had little effect.
This trend fits with new information from Chainalysis, which supported what TRM Labs found. Chainalysis said that after the Hydra marketplace closed in 2022, scam shops and dark web markets made much more money. Darknet markets made a huge 25% greater sum of money than the previous year, bringing their total amount to almost $2 billion in 2023.
Chainalysis also pointed out that two new dark web markets have opened up in Moscow and are actively advertising their services. These sites are trying to fill the void left by Hydra’s demise, which marks a major shift in the darknet market.
As regulators examine the industry more closely and take more action, the crypto industry continues to figure out how to fight illegal activities while encouraging legal growth and innovation.
