Crypto crime hits record $20 billion in 2022, report says

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Illicit use of cryptocurrencies hit a record $20.1 billion last year as transactions involving companies targeted by U.S. sanctions skyrocketed, data from blockchain analytics firm Chainalysis showed on Thursday.

The cryptocurrency market floundered in 2022, as risk appetite diminished and various crypto firms collapsed. Investors were left with large losses and regulators stepped up calls for more consumer protection.

Even as overall crypto transaction volumes fell, the value of crypto transactions related to illicit activity rose for the second year running, Chainalysis said.

Transactions associated with sanctioned entities increased more than 100,000-fold in 2022 and made up 44% of last year's illicit activity, Chainalysis said.

Funds received by the Russian exchange Garantex, which was sanctioned by the U.S. Treasury Department in April, accounted for "much of 2022's illicit volume", Chainalysis said, adding that most of that activity is "likely Russian users using a Russian exchange." A spokesperson for Chainalysis said wallets are tagged as "illicit" if they are part of a sanctioned entity.

Garantex did not immediately respond to an emailed request for comment.

The United States also imposed sanctions last year on cryptocurrency mixing services Blender and Tornado Cash, which it said were being used by hackers, including from North Korea, to launder billions of dollars worth of proceeds from their cyber crimes.

The volume of stolen crypto funds rose 7% last year, but other illicit crypto transactions including those related to scams, ransomware, terrorism financing and human trafficking, saw volumes fall.

"The market downturn may be one reason for this," Chainalysis said. "We've found in the past that crypto