Illicit Crypto Income Is Falling — and That’s a Good Sign

Chainalysis recently published a report with a datapoint that, in my view, deserves attention for the right reasons: in 2023, illicit revenues tied to crypto scams and hacks declined materially year over year.

According to the report, scam-related proceeds fell by 29.2%, and hack-related proceeds dropped by 54.3%. In total, the amount of stolen cryptocurrency was estimated at $24.2B, down from $39.6B in 2022. Chainalysis also notes that 61.5% (about $14.9B) was associated with sanctioned entities and jurisdictions.

Why the trend is encouraging

I’m genuinely happy to see fewer blatant scams. It’s a sign of a maturing market: better infrastructure, more awareness, improved security practices, and stronger due diligence across the ecosystem.

But it’s also important to interpret these charts responsibly. Crypto markets evolve fast, and absolute numbers alone don’t tell the whole story. Liquidity and participation have been increasing over time, so comparing raw totals year to year can be misleading without context.

Context matters (a lot)

If you exclude extreme, one-off events—like the collapse of FTX—the overall picture becomes less dramatic. And while the damage from such failures is real, in many cases there are still ongoing efforts to compensate investors at least partially.

On a personal note, I can relate: we also had crypto on FTX. I’ll share that story another time—there are lessons there worth unpacking properly.

Sanctions, “illicit” labels, and the decentralization debate

Another layer here is the sanctioned-funds category. You can remove sanctioned money from the chart and the narrative shifts again. And if we’re honest, there is likely far more sanctioned or shadow activity in cash—yet nobody blames the dollar itself for that.

This is where the core principle of decentralization matters to me. The whole point of building open networks was to ensure that what’s ours belongs to us—and what isn’t ours shouldn’t be controllable by us. Freedom and self-custody were foundational ideas in crypto, and we shouldn’t forget that when reading reports and headlines.

My takeaway

The conclusion is simple: fewer scams is good for everyone. And as the market cleans up, we see more serious clients and more interesting projects—the kind of work I actually want to spend time on.

Web3 and IT business are moving forward. Slowly, imperfectly, but in the right direction.