Confounding expectations, the collapse in cryptocurrency prices since 2021 had no meaningful impact on the dollar value of crypto-related crime in 2022. Indeed, TRM data reveals at least USD 7.8 billion paid into Ponzi or pyramid schemes, USD 1.5 billion spent on darknet markets specializing in illegal drugs, and USD 3.7 billion stolen through hacks and exploits, based on TRM Labs data.
Among the possible reasons behind this resilience is crypto’s qualitative leap away from Bitcoin domination towards a new multi-chain reality that has given rise to novel threats.
For example, in 2022, approximately USD 2 billion was stolen through attacks on cross-chain bridges, which enable cryptocurrency to pass from one blockchain to another. Criminals also increasingly rely on chain-hopping, or moving funds through various blockchain networks, as part of their money laundering strategies to obscure the source and destination of ill-gotten gains.
The multi-chain era has had a sweeping impact on the distribution of illicit crypto volume as a whole, where Bitcoin’s share plummeted from 97% in 2016 to 19% in 2022. In 2016, two thirds of crypto hack volume was on Bitcoin; in 2022, it accounted for just under 3%, with Ethereum (68%) and Binance Smart Chain (19%) dominating the field. And while Bitcoin was the exclusive currency for terrorist financing in 2016, by 2022 it was all but replaced by assets on the TRON blockchain, with 92%.
