The outlook of global crypto markets, which have been recovering well this year with the prices of digital assets like Bitcoin up over 80% at the midyear point, has been infused with further positivity following the release of the latest Crypto Crime Midyear Update from Chainalysis. This research shows that cryptocurrency inflows to known illicit entities have declined by US$5.2billion (a 65% decrease) compared to the same time last year, while inflows to risky entities such as high-risk exchanges and crypto mixers are down 42%.
Encouragingly, inflows to illicit addresses are down in nearly every category of crypto crime – from hacks and malware to fraud shops and darknet markets – with the decline in scam revenues being the most significant. As of June, crypto scammers have taken in nearly US$3.3 billion less (at 77% decline) in 2023 than they did in 2022, for a total of just over US$1.0 billion this year. This decline is especially impressive given that last year, crypto scam revenues had already dropped by 46%.
“After a chaotic 2022 which saw significant volatility and the high profile collapse of FTX, it is reassuring to see confidence return to the crypto markets as asset prices are largely on the rise, and the volume of crypto crime has dropped significantly,” said Kim Grauer, Director of Research at Chainalysis. “This bodes especially well for the UAE, where the government remained fervently committed to its vision of establishing the country as a global crypto hub even through challenging times.”