Crypto is back in the black after a tumultuous 2022, with BTC skyrocketing 77.83% throughout the year so far. The best part is that crypto crime rates have dropped like a stone. Chainanalysis reported a 65% decrease in flows to known illicit entities compared to the same time last year. With no doubt, it is apparent that the industry is coming into its own.
Sharp Decline in Crypto Crime
According to Chainanalysis, there has also been a 42% decrease in inflows to risky entities, as well as a 28% decrease in inflows to legitimate ones.
Scams are nearly always the highest-revenue form of cryptocurrency-based crime, but in 2023, scam revenue plunged by almost $3.3 billion from 2022 to just over $1.0 billion.
In Chainanalysis’ view, the category’s revenue decline is largely driven by the sudden disappearance of two large-scale scams – VidiLook and Chia Tai Tianqing Pharmaceutical Financial Management.
Unfortunately, ransomware attacks still remain a threat, inflicting losses of at least $449.1 million through June this year.
Chainanalysis projects that ransomware attackers will take $898.6 million into their pockets by the end of the year, which is the second-largest amount ever extorted by ransomware.
Ransomware attacks have resurged this year after waning in 2022 due to large organizations being targeted in big game hunting. The success of small attacks is also increasing, according to the report.
According to today’s statistics, 56.7% (310,250 BTC) of all illicit BTC funds are held by darknet markets – a decrease of 2.6% over last month – and 50,926 BTC are scammed, down 0.7% from last month.
Bitcoin Futures Reflect a Positive Outlook for BTC Price
This positive picture overall is further supported by an increase in activity in the derivatives market. As Bitcoin attempts to consolidate above $30,000, open interest in it is on the rise. There are 501,610 BTC in open futures contracts as of this writing – up from 446,300 in late July.
An increase in open interest indicates traders’ bullish sentiment and also suggests Bitcoin’s price will rise in the near future. With Bitcoin futures activity picking up, traders seem ready to capitalize on the cryptocurrency’s potential.
The Fed Issues Crypto-Related Guidance to Banks
Further supporting Bitcoin’s bullishness, the Federal Reserve released more details on its crypto monitoring program for banks under its regulation. It outlined that banks could form technology-driven partnerships with non-banks.
In addition, the Fed provided more information about the steps banks must take before engaging in stablecoin activities, emphasizing the importance of proper safeguards.
According to the Federal Reserve, it aims to “foster the benefits of financial innovation while recognizing and appropriately addressing risks to ensure the safety and soundness of the banking system.”
While a lot of gloom has been coming out of the SEC (Securities and Exchange Commission) choking the crypto asset industry, the Fed’s move might open up crypto to broader adoption and create an opportunity for future growth.
2023 Is Shaping Up to Be a Positive Year for Crypto
When looking at the crypto crime data, one can see that both the government and companies’ efforts are doing their part to protect users from malicious actors. In addition, it is clear from the US central bank’s latest move that it recognizes the potential of the crypto industry. Last but not least, crypto derivatives’ activity confirms the positive outlook of crypto. So, it’s a safe bet that crypto is here to stay and is likely to grow in 2023 and beyond.
This article is not supposed to provide financial advice. Digital assets are risky. Be sure to do your own research and consult your financial advisor before investing.