Now that a new year is upon us, Chainalysis has released 2022 data on illicit activity in the cryptocurrency ecosystem. While this analysis is very instructive, we will nonetheless note the limitations that allow us to qualify the proposed figures.
The state of illicit cryptocurrency transactions in 2022
This week, Chainalysis released an excerpt from its report due out in February on illicit cryptocurrency transactions in 2022.
If the latter have unfortunately increased since 2021, however, they remain marginal at 0.24% of the total volume or the equivalent of a 416 transaction:
Figure 1 – Volume of illicit cryptocurrency transactions in 2022
In terms of value, that’s $20.1 billion. If this data is really substantial, it should be reduced, for example by remembering that in the last 24 hours Binance has generated more than 31 billion dollars in spot trading volume.
If we take a closer look at the activities that make up this study, we notice it 44% of the volume involves transactions on addresses sanctioned by the Office of Foreign Assets Control (OFAC) of the US Treasury:
Figure 2 – Details of the types of illicit transactions
This data on OFAC sanctions is interesting, because it results that a large part of this 44% concerns the Russian exchange Garantexsanctioned in April 2022. Since these sanctions adopted by OFAC apply, in theory, only to American citizens, nothing prevents Russians use this local platform legally in your jurisdictionwhich will still feed the data collected by Chainalysis.
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The nuances to consider in this data
In addition to the Garantex case, the Chainalysis analysis includes some subtleties that qualify the data presented. First of all, this study is for on-chain data onlywhich are, moreover, the only ones that can be verified with certainty.
This implies that intra-exchange transactions, which are recorded in an external ledger of the blockchain, cannot be taken into consideration. It then opens the debate about the activities of FTX, Celsius where other companies cheated in 2022, but whose activities are not reflected in the analysis.
It should also be noted that some activities are difficult to quantify, such as the payment of drugs in cryptocurrencies, which can be compared to a simple transaction from an on-chain point of view.
However, the numbers are changing as Chainalysis finds new methods to monitor the full range of illicit activities in the ecosystem. Thus, if, for example, the value of 14 billion dollars was initially anticipated for 2021, an update with new calculations brought this figure to 18 billion.
On the other hand, it would be easy to shorthand it by saying that “illicit activities doubled in 2022», because we have gone from 0.12 to 0.24% of transactions. However, such reasoning would be fallacious.. Indeed, while the criminal industry knows no respite, the cryptocurrency market has actually experienced a decline in activity in 2022. Based on this observation, this mechanically increases the share of illicit transactions in the total volume. .
👉 Also in the news – The SEC accuses Gemini and Genesis for their activities with retail investors
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Source : chain analysis
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