Criminal syndicates hold over $25 billion in cryptocurrencies from numerous illicit sources

London's Metropolitan Police Service (MPS) has carried out the UK's largest-ever cryptocurrency seizure, taking £180 million worth of cryptocurrency from a man suspected of money laundering. Meanwhile, the U.S. Department of Justice has seized $3.6 billion worth of Bitcoin in connection with the 2016 Bitfinex hack, in what is currently the largest ever recovery of stolen assets in cryptocurrency or fiat.

These stories are important not only because they allow financial compensation for victims of cryptocurrency crimes, but also because they disprove the notion that cryptocurrency is an untraceable, unidentifiable asset well suited to crime. If cybercriminals know that law enforcement has the ability to seize their cryptocurrencies, this could reduce their incentive to use cryptocurrencies in the future.

These cases also raise an important question. How many cryptocurrencies are currently held by known criminal entities on the blockchain and thus theoretically could be seized by law enforcement? The answer is not just cryptocurrency-based crime proceeds in 2021, but all criminal proceeds still held by visible addresses. Below, we analyze the sum of cryptocurrency holdings that can be traced back to illicit sources, as well as the total balance of criminals who hold $1 million or more in cryptocurrency.

Criminal syndicates hold over $25 billion in cryptocurrencies from numerous illicit sources

Let's start by looking at the year-end crime balances for the past five years, broken down by the type of illegal activity that was funded. In this analysis, criminal balance refers to any funds currently held by addresses that Chainalysis believes belong to illicit actors. These addresses may belong to criminal services, such as darknet markets, but may also be hosted by private wallets in some cases, as in the case of stolen funds.

Criminal syndicates hold over $25 billion in cryptocurrencies from numerous illicit sources

Two things stand out the most: The first is the huge increase in crime balances in 2021, with criminals holding $11 billion worth of funds from known illicit origins at the end of 2020, compared to just $3 billion at the end of 2020 . The second is the dominance of stolen funds. Stolen funds accounted for 93% of all criminal balances at the end of 2021, at $9.8 billion. Darknet market funding was a close second at $448 million, followed by scams at $192 million, fraud shops at $66 million and ransomware at $30 million.