The report, obtained on Thursday, revealed that those
illicit funds dropped by approximately $9.3bn, declining from $31.5bn in 2022
to $22.2bn in 2023.
The blockchain research platform noted that the drop could
be attributed to an overall decrease in crypto transaction volume, both
legitimate and illicit.
Chainalysis noted that centralised exchanges had been the
primary destination for funds sent from illicit addresses, at a rate that has
remained relatively stable over the last five years.
“Over time, the role of illicit services has shrunk, while
the share of illicit funds going to DeFi protocols has grown.
“We attribute this primarily to the overall growth of DeFi
generally during the period, but must also note that DeFi’s inherent
transparency generally makes it a poor choice for obfuscating the movement of
funds,” it said.
The firm indicated that the 2023 trend closely resembled
2022 regarding the breakdown of service types used for money laundering.
However, it added that there was a slight decrease in the
share of illicit funds directed to illicit service types, accompanied by an
increase in funds moving towards gambling services and bridge protocols.
“If we zoom in to look at how specific types of crypto
criminals laundered money, we can see that there was a significant change in
some areas. Most notably, we saw a huge increase in the volume of funds sent to
cross-chain bridges from addresses associated with stolen funds.
“We also observed a substantial increase in funds sent from
ransomware to gambling platforms, and in funds sent to bridges from ransomware
wallets,” it added.
Further, Chainalysis said 109 exchange deposit addresses
received over $10m worth of illicit cryptocurrency each, and collectively, they
received $3.4bn in illicit cryptocurrency in 2023.
“While that still represents significant concentration, in
2022, only 40 addresses received over $10m in illicit crypto, for a collective
total of just under $2.0bn.