AFC CHALLENGES
Global cryptocurrency crime on the rise
Illicit transaction estimates rose to another all-time high of $ 20.6 billion in 2022 . 2 Graphic 1 shows the increased levels of illicit activity across all categories over the past six years .
Graphic 1 : Total cryptocurrency value received by illicit addresses ( 2017-2022 )
Child abuse material Ransomware Stolen funds Sanctions Terrorism financing Scam Cybercriminal administrator Fraud shop Darknet material
$ 10B $ 5B |
$ 4.9B |
$ 4.6B |
$ 8.4B |
0
Source : Chainalysis 3
2017 2018 2019 2020 2021 2022
The 2022-2023 period will probably go down as a significant or pivotal period for cryptocurrency crime . The increased criminal cases are not simply due to the increased application of currency types but due to several high-profile cases that were highly publicized , for example , the FTX failure . These cases represent just the tip of the iceberg in terms of sanctions and overall crime investigations involving cryptocurrency . Isolated cases and enforcement actions are summarized in the following cases .
Highlighted cases
• Common liquidity issues causing the failure of several large firms ( e . g ., FTX , Celsius , Three Arrows , etc .):
— FTX : Over a 10-day period in November 2022 , the company collapsed due to excessive liquidity issues and failure to obtain venture capital funding . The CEO was forced to resign and was replaced by a courtappointed CEO .
— Celsius : From early May to July 2022 , the company experienced increasing liquidity and solvency issues due largely to the failed launch and eventual collapse of its Luna coin . This eventually led to the company filing for bankruptcy on July 13 , 2022 . 4
— Three Arrows : By June 2022 , it was confirmed that liquidations caused the company ’ s collapse and insolvency . The company was linked to liquidations that brought bitcoin ’ s price as low as $ 17,500 while other cryptocurrencies suffered larger losses . The company was also hurt by the collapse of Luna .
• Binance . US ( June 2023 ):
— Charges were filed against the founder of Binance . US by the Securities and Exchange Commission ( SEC ) in June 2023 for evading securities rules . The company allegedly unlawfully offered and sold cryptocurrencies ( BNB / Binance USD stablecoin ) and certain crypto-lending products . BAM Trading , doing business as Binance . US , also deceived customers about nonexistent trading controls and market monitoring on the Binance . US platform , the commission said . 5
• Hydra ( April 2022 ):
— Since 2016 , Hydra gradually became one of the most prominent Russian darknet markets , offering ransomware-as-a-service ( RaaS ), hacking and stolen information , as well as stolen / counterfeit cryptocurrency and illegal drugs . Hydra offered a viable catalyst for the transfer of illicit value for purposes and drug movement / money laundering purposes . From 2016 to 2020 , Hydra ’ s value rose from approximately $ 10 million to over $ 1.3 billion and was also included in the National Money Laundering
28 acamstoday . org