Illicit cryptocurrency transactions are at a record high, with more than $31.4 billion worth in 2022.
That’s about $3b more than the previous year, and despite the biggest market crash in history.
The research, from Chainalysis, acknowledged that 2022 was one of the most tumultuous in cryptocurrency history, with several large firms “imploding”.
Out of the $31.4b worth of illicit transactions, 44% of those came from activity associated with organisations that had been sanctioned by the US Office of Foreign Assets Control.
One prevalent example was Garantex, a Russia-based virtual currency exchange, which was sanctioned by OFAC in April 2022 for facilitating illegal activity.
Dark web marketplace Hydra was also sanctioned and shut down by authorities in 2022.
Also, prevalent this year was an increase in hackers stealing cryptocurrencies, which rose 7% year-on-year.
Other criminal activity included dark net markers, ransomware, child exploitation material and terrorist financing, among others.
But most of those subcategories had declined this year, said Eric Jardine, Chainalysis cybercrimes researcher.
“We’ve found in the past that crypto scams, for instance, take in less revenue [when the market drops] likely because users are more pessimistic and less likely to believe a scam’s promises of high returns at times when asset prices are declining,” the report said.
“If you find that the bear market reverses, and we go into a bull market phase in crypto my guess will be a lot of the crime types we observed will increase significantly – especially those that are sensitive to market conditions,” said Jardine.
Despite the record high in illicit transactions, illegal activity remained a tiny percentage of all transactions – 0.24 percent.