2024 Web3 Industry Review: Criminal Activities Remain Rampant, Regulatory Measures Show Initial Results

The year 2024 is a milestone year for the Web3 industry. The market value of cryptocurrencies and infrastructure applications has reached unprecedented heights, but at the same time, criminals are also exploiting these infrastructures to optimize or create new criminal methods. This article will clarify the impact of compliance measures on criminal activities by statistically analyzing the scale of major types of cryptocurrency crimes, in order to raise awareness among the industry and government regarding the dangers of cryptocurrency crime.

The situation of cryptocurrency crime remains severe

In 2024, the total amount of stablecoins received by high-risk addresses reached 649 billion USD, slightly higher than the previous year. These high-risk activities accounted for 5.14% of the total trading volume of stablecoins for that year, although this was a decrease of 0.80% compared to 2023, it still remained significantly higher than the levels in 2021 and 2022.

In terms of stablecoin types, USDT on the Tron network has remained dominant during the period from 2021 to 2024. However, in 2024, the share of USDT and USDC on the Ethereum network has increased.

The scale of online gambling continues to grow

In 2024, the funding scale of online gambling platforms and their related payment service platforms reached $217.8 billion, an increase of over 17.50% compared to 2023. Notably, the usage rate of USDC in the online gambling sector has significantly increased, accounting for 13.36%, far higher than the 5.22% in 2023. This indicates that despite USDC being issued and regulated by compliant entities, its application in the online gambling field is still on the rise.

The scale of black and gray industry transactions remains unchanged

In 2024, addresses related to the black and gray industries on the Ethereum and TRON networks received over $278.1 billion in funds, slightly higher than in 2023, while the transaction volume for these two years far exceeded that of 2021 and 2022. Cryptocurrency collateral trading platforms play an important role in the development of the black and gray industries, establishing trust among criminals.

A certain guarantee platform's business scale in Southeast Asia expanded to $2.64 billion in the fourth quarter of 2024, which is closely related to the popularity of stablecoins in local real economic activities.

The Scale of Crypto Fraud is Rapidly Increasing

In 2024, the scale of stablecoins received by blockchain addresses related to fraudulent activities experienced explosive growth, reaching $52.5 billion, surpassing the total of previous years. However, this astonishing growth trend may not be entirely accurate, as the statistics are influenced by the methods of security vendors and the increased level of fraud by illicit entities.

The scale of money laundering begins to shrink

In 2024, blockchain addresses associated with 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 legislative activities by major policy entities over the past two years have effectively suppressed the money laundering crime situation in the crypto industry.

The on-chain freezing activities of stablecoins have significantly increased

In 2024, stablecoin issuers actively cooperated with law enforcement actions. Major stablecoin issuers froze over $1.3 billion worth of stablecoins on the Ethereum and TRON networks, which is double the scale of the previous three years.

Sanction Trends

The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) and Israel's National Bureau for Counter Terror Financing (NBCTF) have collaborated in combating terrorist financing. The scale of funds associated with sanctioned entities' blockchain addresses peaked in 2022 and has been declining year by year. However, for criminal organizations utilizing these infrastructures for illegal activities, the effectiveness of regulatory measures has not been significant.

Regulation Brings Positive Impact to Hong Kong

In 2024, the attitude of major global regulatory agencies towards cryptocurrencies shifted from a wait-and-see approach to more proactive intervention. Taking Hong Kong as an example, its compliance policies have established a safer and more controllable crypto ecosystem through clear legal requirements, customer fund protection, and measures to combat illegal activities. Data shows that since the third quarter of 2023, the proportion of high-risk stablecoins flowing into Hong Kong has sharply decreased, indicating that local stablecoin trading related to risky activities has been effectively suppressed.

Summary

2024 will be a year of full revival for the Web3 industry, as well as an important year for major economies to begin addressing the industry. Although the scale of crypto crime remains enormous, top-down compliance regulations and bottom-up industry self-discipline have already brought positive impacts to the crypto industry in some countries or regions. It is believed that in the future, the industry will welcome a safer and more trustworthy development outlook.