2024 Crypto Assets Crime Situation Analysis Report

The year 2024 is significant for the Web3 industry. The market capitalization of Crypto Assets and the adoption rate of infrastructure have both reached historic highs, but at the same time, criminals are also leveraging this infrastructure to optimize or create new criminal patterns. This report quantifies and discloses the scale of major Crypto Asset crimes and elaborates on the impact of compliance measures on the scale of the criminal industry, calling on the industry and government to pay attention to the harm caused by Crypto Asset crimes.

Crypto Assets crime situation remains severe

In 2024, the total amount received by high-risk addresses used for receiving, transferring, and storing major stablecoins on the Ethereum and TRON networks reached $649 billion, slightly higher than the previous year. This portion of high-risk activities accounted for 5.14% of the total stablecoin transaction activities for the year, which is a decrease of 0.80% compared to 2023, but still significantly higher than in 2021 and 2022.

From the perspective of stablecoin types, between 2021 and 2024, USDT on the Tron network has maintained a dominant position. However, in 2024, the shares of USDT and USDC on the Ethereum network both increased.

The Scale of Online Gambling Continues to Grow

In 2024, the funding scale of online gambling platforms and their related payment platforms reached $217.8 billion, an increase of over 17.50% compared to 2023. Notably, the usage ratio of USDC in the online gambling sector significantly rose to 13.36% in 2024, far exceeding the 5.22% in 2023. This indicates that as USDC's market share increases, its adoption in the online gambling sector also significantly improves.

The scale of black and gray market transactions remains unchanged

In 2024, addresses related to transactions involving black and gray industries in the Ethereum and Tron networks received over $278.1 billion, slightly higher than in 2023. The transaction volume for these two years far exceeds that of 2021 and 2022.

Crypto Assets collateral trading platforms play an important role in the development of the black and gray industries. Taking a certain collateral platform as an example, its business scale expanded to 2.64 billion USD in the fourth quarter of 2024, reflecting the trend of stablecoins becoming more prevalent in the real economy activities of Southeast Asia.

The scale of encryption fraud has surged dramatically

In 2024, the scale of stablecoin receipts related to fraudulent activities associated with blockchain addresses experienced explosive growth, reaching $52.5 billion, surpassing the total of previous years. However, this astonishing increase may not be entirely accurate, as the statistics are limited by the methodologies of security vendors and the rising level of fraud by illicit entities.

The scale of money laundering begins to shrink

In 2024, blockchain addresses related to money laundering activities received a total of $86.3 billion in stablecoins, slightly lower than in 2023 and on par with 2022. This may indicate that significant law enforcement actions and regulatory legislation by major policy entities over the past two years have effectively suppressed the money laundering crime situation in the Crypto Assets industry.

An audit of the hot wallet addresses of major centralized crypto assets trading platforms found that the scale of funds received for money laundering is generally proportional to their business scale, but the proportion for certain platforms has significantly decreased recently, which may be a result of their compliance operations.

The on-chain freezing activities of stablecoins have increased significantly

In 2024, major stablecoin issuers froze over $1.3 billion worth of stablecoins on the Ethereum and Tron networks, which is twice the scale of the previous three years. The trading volume of the frozen addresses reached $12.9 billion that year, remaining basically flat compared to 2023, indicating that on-chain Crypto Assets criminal activities had begun to become active several years ago, but effective crackdowns did not start until 2024.

Sanction Trend Analysis

The scale of funds related to blockchain addresses disclosed by the U.S. Office of Foreign Assets Control ( OFAC ) and the Israeli National Bureau for Counter Terror Financing ( NBCTF ) in connection with sanctioned entities peaked in 2022 and has since declined year by year. Although regulatory measures by government agencies have a significant impact on the operations of sanctioned entities, their effect on criminal groups utilizing these infrastructures for illegal activities is limited.

Regulation Brings Positive Impact to Hong Kong

2024 is a year for the acceleration of compliance in the encryption industry. Taking Hong Kong as an example, its compliance policies have established a safer and more controllable crypto ecosystem through clear legal requirements, protection of client funds, combating illegal activities, attracting institutional capital, and aligning with international standards.

Data shows that after the third quarter of 2023, the proportion of risk stablecoins flowing into Hong Kong has sharply decreased, indicating that local trading activities related to risk have been effectively suppressed.

Summary

2024 is a pivotal year for the crypto industry, marking a comprehensive revival and the recognition of the industry's importance by major economies. Although the scale of crypto crime remains significant, top-down compliance regulations and bottom-up industry self-discipline have positively impacted the crypto sector in certain countries or regions. The industry is moving towards a safer and more trustworthy direction.