As global cryptocurrency utilisation continues to rise, evidenced most recently in the post-US election bull run, so too does the ever-present shadow of crypto crime. In its annual Crypto Crime report, Chainalysis found that through 2024, illicit addresses received a whopping US$40.9 billion — a figure that the blockchain data leader estimates will rise to US$51 billion, as it continues to refine its analysis.
While this places 2024 on track to be the second most prolific year for cryptocrime[1], it’s important to recognise that crime remains just a minute share of the larger crypto ecosystem, accounting for just 0.14 per cent of the year’s total on-chain transaction value.
What Chainalysis experts noted as being concerning, however, is the ongoing diversification and professionalisation of crypto crime. “An increasing number of illicit actors, including transnational organised crime groups, are exploiting cryptocurrency to conduct a range of traditional criminal activities, such as drug trafficking, gambling, intellectual property theft, money laundering, human and wildlife trafficking, and violent crime. Notably, some criminal networks are turning to cryptocurrency to enable “polycrime” —engaging in multiple forms of criminal activity,” said Eric Jardine, Cybercrimes Research Lead at Chainalysis.
This trend is evidenced in the fact that of the US$40.9 billion received by illicit addresses in 2024, US$10.8 billion can be attributed to “illicit-actor organisations”, a category Chainalysis defines to encompass wallets linked to individuals and services directly involved in cybercrime, including hacking, extortion, trafficking, and scams, as well as those facilitating these crimes by offering infrastructure, tools, and services such as laundering-as-a-service.
Following the introduction of the landmark Payment Token Services Regulation by the Central Bank of the UAE (CBUAE) in July last year, another particularly concerning development for the UAE’s rapidly advancing crypto community is the fact that for a third year in succession, Chainalysis has observed a steady diversification away from BTC, with stablecoins now occupying the majority (63 per cent) of all illicit transaction volume. Stablecoins currently account for the largest share of crypto activity in the UAE (51 per cent), standing significantly higher than both Bitcoin (19 per cent) and Ether (9 per cent), which are typically considered to be the most recognised and popular cryptocurrencies.
“The UAE’s crypto community, including global stakeholders, is closely monitoring and actively engaging with the Central Bank’s stablecoin regime. With the approval of the AE coin, the country’s first regulated, AED pegged stablecoin, consumers will no doubt be excited to leverage the benefits these assets bring. However, the threat of losing their hard-earned investments to crypto criminals has the potential to dampen this enthusiasm. Ecosystem stakeholders, including VASPs, regulatory and supervisory authorities, as well as law enforcement agencies, must collaborate to implement robust safeguards against cryptocrimes, which not only protect the users but also reinforce trust in the UAE’s burgeoning digital asset ecosystem. This would ensure that innovation in the crypto space is matched by resilience against evolving threats,” said Arushi Goel, Policy Lead – Middle East and Africa at Chainalysis.
[1] While 2022 recorded a higher value of transfers to illicit addresses, it’s worth noting that of the US$54 billion recorded that year, a considerable share (US$ 8.7billion) was comprised of creditor claims against FTX alone
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