Chainalysis: Stablecoins Emerge as the Cornerstone of Illicit Crypto Activity in 2024

Chainalysis: Stablecoins Emerge as the Cornerstone of Illicit Crypto Activity in 2024

Chainalysis Report Highlights Increasing Professionalization of Crypto Crime

Illicit cryptocurrency activity reached alarming levels in 2024, with $40.9 billion directed to wallets linked to criminal operations, according to the latest report from Chainalysis. As blockchain systems continue to mature, malicious actors are adopting increasingly sophisticated techniques and refining their operations into organized ventures. The report projects that the total volume of illicit crypto transactions for 2024 could exceed $51 billion as additional addresses are identified.

This surge is fueled by advanced laundering schemes, including services offered by platforms like Huione Guarantee, and a growing focus on centralized exchange (CEX) platforms as prime targets. Chainalysis’s findings highlight the expanding professionalization of crypto crime, emphasizing the global scale of these activities.

Stablecoins Dominate Illicit Transactions

Stablecoins emerged as a dominant force in illicit transactions throughout 2024, accounting for 63% of the total volume. Their global liquidity and versatility make them attractive tools for a range of illegal activities, including sanction evasion. Sanctioned entities have increasingly exploited stablecoins, leveraging their utility to bypass restrictions.

Issuers such as Tether and Circle have responded by freezing funds linked to criminal operations, showcasing an ecosystem-wide effort to mitigate misuse. This dual nature of stablecoins—as tools for crime and instruments of enforcement—underscores the complexity of their role in the crypto economy.

Key Findings and Trends

• Cybercrime: North Korean hacking groups were responsible for $1.34 billion in theft, representing 61% of all funds stolen in 2024. High-level tactics, including stolen private keys, were central to these operations.

• Ransomware: While ransomware attacks generated hundreds of millions of dollars, victim payments showed a notable decline.

• Darknet Markets and Fraud Shops: Enforcement actions led to significant reductions in these sectors, though other forms of illicit activity have continued to flourish.

• AI-Driven Scams: The integration of artificial intelligence (AI) into fraud schemes, such as tailored sextortion scams, has introduced new challenges for enforcement agencies.

Declining Proportion, Rising Complexity

Despite the total volume of illicit transactions, the proportion of crypto transactions linked to criminal activity dropped to 0.14% in 2024, a notable decline from 0.61% in 2023. However, Chainalysis cautions that these figures may rise as attribution capabilities improve and more illicit addresses are identified.

The report emphasizes the challenges of combating the increasingly complex and professionalized world of crypto-related crime. Stablecoins’ growing prominence in these activities highlights the need for robust regulatory frameworks and innovative enforcement measures to address emerging threats effectively.