Recent reports reveal that illicit criminal activity in the crypto market rose, despite the decline in crypto transactions.

This saw the criminal use of cryptocurrencies hit a record $20.1 billion in 2022, as transactions involving companies targeted by U.S. sanctions skyrocketed.

2022 crypto crime saw a 7% increase from $14 billion recorded in 2021.

According to American blockchain analysis firm Chainanalysis, it disclosed that the market downturn may be one reason for the increase in crypto theft.

The firm said, “The market downturn may be one reason for this. We’ve found in the past that crypto scams, for instance, take in less revenue during bear markets.

Chainalysis disclosed that its $20.1 billion estimate only includes activity recorded on the blockchain, and excludes “off-chain” crimes such as fraudulent accounting by crypto firms while noting that transactions associated with sanctioned entities increased more than 100,000-fold in 2022 and made up 44% of last year’s illicit activity.

Also, Blockchain analytics tool provider, Crystal Blockchain disclosed that Crypto theft was responsible for Over $ 2 billion in Losses in 2022.

In its report, it stated that 2022 saw a significant increase in the number of large-scale hacks, scams, and other crimes using crypto. Due to this trend of incessant crypto theft, a range of authorities and regulators took big steps toward regulating crypto.

Recall that last year, the United States imposed sanctions on cryptocurrency mixing services Blender and Tornado Cash, which it said were being used by hackers, including from North Korea, to launder billions of dollars worth of proceeds from their cyber crimes.

Reports disclose that Tornado Cash was used to launder more than $96 million of malicious cyber actors’ funds derived from the June 24, 2022, Harmony Bridge Heist, and at least $7.8 million from the August 2, 2022, Nomad Heist.

Following the sanction on the platform, The U.S department of treasury wrote in a statement, “Today, Treasury is sanctioning Tornado Cash, a virtual currency mixer that launders the proceeds of cybercrimes, including those committed against victims in the United States.

“Despite public assurances otherwise, Tornado Cash has repeatedly failed to impose effective controls designed to stop it from laundering funds for malicious cyber actors on a regular basis and without basic measures to address its risks. The Treasury will continue to aggressively pursue actions against mixers that launder virtual currency for criminals and those who assist them.”

The U.S. Treasury has continued to work tirelessly to expose components of the virtual currency ecosystem, like Tornado Cash and Blender.io, that cyber criminals use to launder proceeds from illicit cyber activity and other crimes.