In 2023, TRM Labs' research revealed a significant decrease in the total volume of illicit crypto funds, dropping from $49.5 billion to $34.8 billion compared to the previous year.

This decrease outpaced the overall reduction in cryptocurrency transaction volume by 22% during the same period. Despite this decline, the proportion of total illicit crypto funds saw a 9% decrease year-on-year, indicating a shrinking footprint of bad actors in the crypto space.

Moreover, TRM Labs noted a decline in the total value of funds sent to sanctioned addresses and entities, which decreased from $25.4 billion to $16.2 billion in 2023. This reduction was accompanied by increased pressure from governments and law enforcement bodies, leading to a three-fold rise in sanctions against crypto-related businesses and individuals. Notably, 33 OFAC designations included twelve ransomware groups, six high-risk exchanges, and a cryptocurrency mixing service.

However, despite the overall downward trend in illicit crypto activity, TRM Labs highlighted the resilience of illicit drug sales on darknet marketplaces. The volume of drug sales climbed to $1.6 billion in 2023, up from $1.3 billion in 2022, indicating minimal impact from the general downturn in crypto-related crime.

These findings align with recent insights from Chainalysis, which also indicated a surge in revenue for fraud shops and darknet marketplaces following the shutdown of the Hydra marketplace in 2022. The combined revenue of darknet marketplaces reached nearly $2 billion in 2023, marking a significant 25% increase from the previous year.

Chainalysis also identified the emergence of two new darknet marketplaces, actively promoting their offerings in Moscow to fill the void left by Hydra's collapse.