Illicit Activity’s Share in Crypto Shrinks, ‘Significant Problem’ Remains

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According to blockchain analysis company chainalysis, legitimate crypto usage has grown at a much faster rate than illicit. Illicit activity remains a problem.

“Transactions involving illegal addresses accounted for just 0.1% of cryptocurrency transaction volume in 2021, despite the raw volume of illicit transaction volume reaching its highest ever level,” stated Chainalysis.

The team believes that this number will increase as they continue to identify additional addresses that are associated with illegal activity and add their transaction activity to Chainalysis’ historical volumes. The company stated that 0.3% of the 2020 cryptocurrency transaction volume was associated with illegal activity in their last Crypto Crime Report. But, this number has now been increased to 0.62%.

Chainalysis observed that crypto crime is shrinking.

“But, the yearly trends suggest the crime is becoming a smaller part of cryptocurrency ecosystem with the exception 2019 (an extreme outlier year for cryptocurrency crime largely due the PlusToken Ponzi Scheme).

It was also noted that although crypto-based crime reached a new high, with illicit addresses receiving USD 14bn last year (up from USD 7.8bn for 2020), it highlighted that adoption has increased. According to Chainalysis, crypto usage is increasing “faster than ever” with the total volume of transactions across all cryptoassets tracked in 2021 rising to USD 15.8trn, an increase of 567% over 2020.

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