How much crime is there in the crypto industry? Not much when you look closely.

The 2025 Chainalysis Crypto Crime Report has dropped. The numbers are somewhat of a surprise.

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If the anti-crypto voices (regulators, banks, economists and most of my friends) are to be believed, the sprawling crypto industry is a hotbed of crime. Thieves, larcenists and fraudsters in every nook and cranny, all probing and prodding, looking for any opportunity to separate credulous crypto holders from their coins.

Only it is not actually so. There is a comparatively small amount of crime in crypto. But first, a story:

North Korea doesn't make much of anything. Its export business is negligible, worth about $250m in total. 57% of their exports are "wigs, false beards, eyebrows, and eyelashes," which tells you pretty much all you need to know. Oh, and they sell a smidgeon of tungsten, coal, electricity and seafood to China. Mind you, they have recently gotten into the business of exporting soldiers to Russia, but all the indications are that the product has, um, rapid obsolescence.

But then they have The Lazarus Group.

The Lazarus Group is a state-sponsored (and trained) group of cyber-criminals including, more recently, crypto criminals. These people stole over $1.34bn in crypto in 2024. That is 4 times more than all other North Korean exports, and is the mechanism by which the country funds the state. They are very good at it, by all accounts. Among the best crypto hackers in the world. The name "The Lazarus Group" was given them by Western agencies, probably referencing the biblical Lazarus who rose from the dead. It has a nice Gothic ring to it.

Which leads us to the question - how much crypto crime is there, really? If one small nation, both backward and hermetic, can steal $1.34 billion in crypto, then surely the industry is in deep trouble, little more than a fetid swamp to be avoided at all costs.

Well, we have hard facts now. Chainalysis, the world's largest crypto-forensics firm and partner to law enforcement agencies worldwide (including the FBI), has just released their 2025 Chainalysis Crypto Crime Report which shines a light into every corner of this world, both quantitatively and qualitatively. There are other well-known crime chasers in crypto, like Elliptic, but Chainalysis has been the gold standard for nearly a decade.

The report is at pains to point out that the definition of "crypto crime" requires careful nuancing. What The Lazarus Group is involved in is classified as "Stolen Funds" - that is, when an unauthorized entity gains illegal access to a wallet and drains some or all of its contents. The total value of funds stolen globally by all the bad guys in 2024 was $2.4 billion. A little math tells you that North Korea purloined just over 60% of that figure. $2.4 billion is a paltry number; any skilled and crooked cadre of financial engineers in the real world of high finance can easily hoist that (think of the Guptas).

$2.4 billion is not the important number though. Chainalysis also tracks the volume of transactions to "illicit" crypto accounts (accounts flagged as tainted) which include dark markets, illegal online pharmacies, ransomware, sanctioned jurisdictions and entities, terrorist financing and so-called "rugpulls" (blockchain projects that sell fanciful and deceitfully marketed crypto tokens only to quickly disappear into the night), as well as the aforementioned stolen funds. There are, it seems, plenty of ways to break the law other than hacking into some hapless guy's cryptocurrency wallet.

This "illicit" crypto activity is a much bigger market than the "stolen funds" subcategory - it was worth over $41 billion in 2024. I hear gasps - $41 billion is some serious swag. Again, it is not. Not really.

There are a couple of important data points against which to measure this number.

The first data point is the total amount of financial crime in the non-crypto real world (IRL). How much traditional finance and money is involved in dirty work?

The number is $3.1 trillion, according to the most recent research. This number refers to criminal transactions that are reported by victims or law enforcement. The actual figure is much higher, because much of it is hidden from view - illegal tax shenanigans, price gouging, market manipulations, tender fraud and other "dark" manoeuvres which wind up in bloated and anonymous bank accounts in places like the Cayman Islands and Panama.

But wait (I hear you say), of course the IRL number is higher because the crypto market is small in comparison. Which brings me to the punch line.

It is estimated by Chainalysis that 0.14% of crypto transactions are for illicit purposes. Compare that with the world of traditional finance where it is estimated that 5% of transactions are for illicit purposes (this is a conservative figure - the UN estimates that up to 5% of global GDP is used for money laundering alone, never mind the rest).

In any event, this leads to the inescapable conclusion that non-crypto criminal transactions happen 40 times more frequently than crypto ones. Pedants may question the data sources and methodology that lead us to this informal conclusion, but there is a strong underlying reason to support it.

It is this: all the major blockchains are public - anyone can view transactions in real time by clicking on one of many popular tracking ‘block explorer’ websites like Etherscan. Committing crimes in the world of crypto is very, very public. So much so that some of the bigger crimes have led to a stalemate for the criminal - the wallets in which their ill-gotten gains are deposited are watched by thousands of eyes, including those of law enforcement agencies. The money can't be moved without immediate detection. Following the money is child’s play.

Public blockchains are clearly unsafe places to commit crime. Conversely, they are very safe places to store value. This may seem counterintuitive, given the tsunami of adverse publicity and largely uninformed headlines over the past five years or so, but it is hard to argue with the numbers.

One last point: crypto crime has declined steadily since 2023. Perhaps the bad guys have gone back into the shadows, back to committing crimes IRL where they are harder to spot.

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Steven Boykey Sidley is a professor of practice at JBS, University of Johannesburg and a partner at Bridge Capital. His new book It’s Mine: How the Crypto Industry is Redefining Ownership is published by Maverick451 in SA and Legend Times Group in UK/EU, available now. Copy edited by Bryony Mortimer.