Chainalysis Says a Record $51B Crypto Was Spent in Illicit Activities in 2024

Last year will prove to be a record for crypto crime, with as much as $51 billion in illicit activities, according to blockchain analytics firm Chainalysis’ annual 2025 Crypto Crime Report.

While the number is currently $41 billion, Chainalysis predicts the total will grow by about 25% as more crimes are investigated in the coming months.

“We’re certainly on pace, I think, for a potentially record-setting year that's going to be north of $50 billion in total illicit transaction volume on chain,” Eric Jardine, cybercrimes research lead for Chainalysis, told The Defiant in a video call. That would be a new high if you ignore the impact of the one-off FTX collapse in 2022.

Crypto crime in 2022 soared to $54.3 billion thanks to the $9 billion FTX collapse.

Despite that potentially record-setting year, it’s worth noting that the report found just 0.14% of all crypto transactions were linked to illicit activity. That’s down from 0.61% in 2023.

Diversification and professionalization

Jardine said diversification and professionalization of crypto crime stood out as two growing trends in 2024.

Jardine said crypto is being used by all types of criminals, not just darknet-style crimes, which more commonly use crypto to transact.

As for professionalization, Jardine said, firms are “offering a wide array of professional services to illicit actors in the ecosystem.”

And while that type of professionalization has been around for a while, those services are taking on a bigger scale, “selling the underlying infrastructure, tools, and services needed to commit crime and profit, including laundering-as-a-service,” the report said.

The year of AI

2025 will prove to be the year that artificial intelligence (AI) will enter the crypto space in a big way, Jardine predicted. Part of that will be for good, as AI-enhanced detection techniques become more common.

To that end, Chainalysis announced on Jan. 13 that it has acquired Alterya, an AI-powered fraud detection solution. Designed to detect scammers before they meet victims, Alterya has been working with firms like Binance and Coinbase, as well as major financial institutions, to monitor $8 billion in financial transactions every month, Chainalysis said.

It can now “provide real-time proactive fraud protection for payments and enhanced fraud detection during know-your-customer (KYC) checks for exchanges, blockchains, and wallet providers,” Chainalysis said in a release.

Scaling up scams

That said, fraudsters and other bad actors will be turning to AI too, according to Jardine.

“It’s all about this ability to scam on a greater scale and with higher levels of quality,” Jardine said. “It's the fraudulent documentation, the ability to produce high-quality videos, high-quality audio, high-quality text message conversations, all of which are calling vectors to try to get people to turn over credentials, turn over keys, turn over value, all of these sorts of things.”

Deepfake photos and videos will enable people to get past KYC by providing high-quality fake IDs, and webcam verification of that ID, he said. That would make it easier for scammers and thieves to set up exchange accounts to rapidly off-ramp ill-gotten crypto gains into the fiat ecosystem, Jardine added.

Smarter chatbots

AI will be replacing human scammers with chatbots smart enough to realistically engage with targets on messaging and social media platforms, Jardine predicted.

Asked if that sounds like human scammers losing their jobs to AI, Jardine said “yes would be the short answer.”

Instead of a room full of people to do scamming, Jardine said, in the near future if not now, “one individual could do large scale scams across multiple vectors very easily at this point.”

One silver lining is that human traffickers who now set up whole compounds in which people are forced to run scams could be put out of business, he added.

Back to bitcoin

In 2024, for the third year running, stablecoins accounted for about two-thirds of all on-chain crypto crime. That’s a plateau that may not last, Jardine said. Eventually, he predicted, illicit actors are going to figure out that stablecoins, and especially centralized stablecoins like Tether’s USDT and Circle’s USDC, are a “terrible” as a tool of illicit value movement because of the issuers’ ability to freeze their stablecoins.

“The ability to freeze them is not an immaterial concern when you're an illicit actor,” Jardine said. “That message will eventually percolate through. And my expectation would be that once that message is really internalized, illicit actors will move back to other other assets in the ecosystem, ones that are more censorship resistant. Bitcoin being the obvious example.”

Jardine said that despite improving security, the $2.2 billion in stolen funds in 2024 will increase in 2025.

Prices and scams rise together

“If past halving cycles are any indication, 2025 is potentially going to be a year of rapid price movement,” Jardine said. “If the value held to be stolen grows massively, there's a huge incentive for groups to try to steal, and they probably will try.”

One big factor in the increased losses is that as bitcoin’s price increases, new entrants come into crypto.

“Everything else being equal, although anyone can be scammed, new entrants tend to have certain vulnerabilities, just because they're less familiar with things to do, things not to do,” he said. “If asset prices go up during the course of 2025, yeah, my expectation would be scam volumes would rise as well.”