A latest crypto crime report by blockchain analytics agency Chainalysis has revealed that the overwhelming majority of cryptocurrency transactions, roughly 99.6%, are used for legal purposes. The examine sheds mild on the evolving panorama of cryptocurrency utilization and challenges prevailing narratives surrounding illicit actions within the crypto house.
In accordance with the report, the whole worth of cryptocurrency despatched to illicit addresses witnessed a big lower from $39.6 billion in 2022 to $24.2 billion in 2023. The 2022 determine was partly inflated by $8.7 billion in FTX creditor claims following the collapse of the Sam Bankman-Fried-led startup.
Crypto Is Legit, Chainalysis Says
The findings introduced by Chainalysis point out that illicit cryptocurrency transactions accounted for simply 0.34% of all cryptocurrency quantity in 2023, down from 0.42% in 2022 and a considerable decline from 1.3% in 2019.
These figures problem public statements made by influential enterprise leaders, resembling JPMorgan Chase & Co. CEO Jamie Dimon, who’ve expressed considerations about cryptocurrency’s function in unlawful actions like tax avoidance, cash laundering, and terrorism financing.
Crypto followers, together with as Edward Snowden, laughed Dimon off for what they noticed as a very dramatic stance.
Wild how the @SECGov approving a #Bitcoin ETF was all it took to remodel the CEO of @JPMorgan from the King of Cash into that man who spends one half of each interview insisting “I don’t care about Bitcoin,” and the opposite half sobbing that it stole his spouse and shot his canine.
— Edward Snowden (@Snowden) January 17, 2024
Nonetheless, you will need to notice that the Chainalysis figures don’t embody funds derived from non-crypto native crime, potential market manipulation, or funds related to crypto cash laundering.
The report focuses solely on funds stolen in crypto hacks and people directed to addresses recognized as illicit.
Regardless of the decline, it’s price highlighting that cryptocurrency-related crime stays small compared to illicit actions inside the broader monetary trade.
Whole crypto market cap at $1.12 trillion on the weekend chart: TradingView.com
The latest Global Financial Crime Report by Nasdaq estimates that over $3.1 trillion in illicit funds circulated via the worldwide monetary system in 2023. Notably, drug trafficking accounted for $782.9 billion, human trafficking for $346.7 billion, and terrorist financing for $11.5 billion.
Bitcoin-Associated Crimes Dropping
The Chainalysis report additionally sheds mild on the evolving traits in cryptocurrency utilization for illicit functions. Whereas Bitcoin had been the main cryptocurrency utilized by cybercriminals till 2021 attributable to its excessive liquidity nature, its quantity in illicit transactions has been constantly reducing over the previous 5 years.
Bitcoin's quantity in illicit transactions has been constantly down over the previous 5 years. Picture: Freepik
As a replacement, stablecoins, resembling Tether, have emerged as distinguished gamers in each reliable and illicit actions inside the cryptocurrency market.
The rise of stablecoins in illicit transactions highlights the necessity for continued vigilance and regulatory measures to deal with potential dangers. It’s essential for authorities, trade gamers, and legislation enforcement companies to stay proactive in figuring out and mitigating illicit actions whereas concurrently fostering innovation and progress inside the cryptocurrency sector.
Total, the Chainalysis report gives beneficial insights into the state of cryptocurrency transactions, revealing that the overwhelming majority are carried out for authorized functions.
The decline in illicit utilization signifies progress in constructing a safer and compliant crypto ecosystem. Nonetheless, the report serves as a reminder that ongoing efforts are crucial to deal with potential dangers and make sure the accountable use of cryptocurrencies in an more and more digital monetary panorama.
Featured picture from Freepik
