- Illicit crypto transaction volumes notched a record high of $20.1 billion in 2022.
- This figure doesn't include firms that are facing fraud allegations like Celsius, FTX, and Three Arrows.
Illicit crypto transaction volumes notched a record high of $20.1 billion last year amid surging hacks and a sanctions violations, according to blockchain analytics firm Chainalysis.
Kim Grauer, director of research at Chainalysis, told Insider that 2022 was an "undoubtedly interesting year for the crypto industry," with "a driving factor behind this record number is activity associated with sanctioned entities."
From 2021 to 2022, sanctions-related transaction volume accounted for 44 percent of overall illicit volumes and rose more than 10 million percent in a year, per the report on Thursday.
The share of overall crypto activity associated with illicit transactions rose last year for the first time since 2019, and accounted for 0.24%, compared to 0.12% in 2021.
"On the other hand, we found that illicit transaction volume fell across more conventional categories of cryptocurrency-related crime, except for stolen funds, which rose 7 percent year-over-year," Grauer told Insider.
"This decrease could be partly due to the market downturn, given users' skepticism over a scam's promises of high returns when asset prices decline," she said. Crypto's market capitalization is off more than two-thirds from its all-time high in November of 2021, according to Messari.
Grauer notes that the report's figures are a lower-bound estimate and subject to change as more bad actors are revealed. Also, the report doesn't include firms that are facing fraud allegations like Celsius, FTX, and Three Arrows Capital.
Another report indicates that $3.7 billion was lost from crypto scams, hacks, and exploits in 2022, according to blockchain audit firm CertiK. One of last year's notable hacks includes blockchain game developer Sky Mavis' Ronin Bridge, which was exploited for $625 million in April.