Criminals regularly use cryptocurrencies such as bitcoin or ether, it’s true. But the share of crypto transactions linked to illicit activities is very low compared to the total volume, which has increased significantly.
Cryptocurrencies are often accused of being an El Dorado for criminals. The summary of a Chainalysis report published on January 6, however, allows us to strongly temper this idea.
The company specializing in the analysis of crypto transactions reveals that in 2021, only 0.15% of them were linked to illicit activities. This is significantly less than in 2019: at the time, 3.37% of crypto transactions were made by actors engaged in activities prohibited by law.
What this development shows above all is the spectacular development of the crypto market. Criminals, of course, did not stop using cryptocurrencies last year. In 2021, the sums received by illicit addresses have even increased: while the total amounted to $4.6 billion in 2017 and $11.7 billion in 2019, it rose to $14 billion in 2021.
But legal transactions have increased, and incomparably more. ” The growth of legitimate uses of cryptocurrencies so clearly exceeds that of criminal uses, that the share of illicit activities in crypto transaction volumes has never been so low “, points out Chainalysis.
Stronger regulation of cryptocurrencies
It is important to note that legal transactions are not always transactions with very concrete utility. A study by the National Bureau of Economic Research published in October 2021 estimates, for example, that 90% of transactions recorded on the bitcoin blockchain are not linked to “ concrete economic activities but are linked to the design of the Bitcoin protocol as well as the taste of many participants for anonymity. »
According to the authors of the study, many bitcoin users thus move their funds to various addresses and fragment their payments so that their activities are less easy to trace.
Despite this nuance to take into account, the fact that crypto transactions linked to illegal activities are increasing so little compared to the way they evolve in the legal sphere is surprising, even reassuring. While this development is mainly linked to the popularity of crypto, it also shows, to a lesser extent, that the judicial authorities are better able to combat illicit crypto activities.
Crypto Money Laundering Services Sanctioned
At the end of 2021, for example, the FBI seized $2.3 million worth of cryptocurrencies linked to the REvil ransomware group. Chainalysis also discusses complaints filed by the CFTC, the US stock exchange regulatory agency, against scams crypto and the sanctions that a US financial regulator (OFAC) applied to Suex and Chatex, “ two crypto services based in Russia and very active in money laundering “.
However, the fight against illicit crypto activities must not slacken, as the spoils of criminals in 2021 ($14 billion) remain high. The two categories of illicit activity that have seen their crypto loot increase the most in a year are scams and “stealth funds”.
Cryptocurrency scams and theft
Revenue from scams involving crypto transactions increased by 82% to $7.8 billion. A significant portion of these sums comes from what is called a rug sweater : a type of scam where malicious developers make their victims believe that they are investing in a reliable crypto project, then run away with the money that their targets have paid into the project.
This is particularly what happened with the Thodex platform in April 2021: it abruptly stopped transactions, preventing the characters who had invested in the project from withdrawing their money ($2 billion in all). The founder of Thodex is now wanted by the judicial authorities of his country, Turkey, for “aggravated fraud” and “creation of a criminal organization”.
Direct crypto theft has also increased significantly: the equivalent of $3.2 billion in crypto was stolen in 2021, an increase of more than 500% compared to 2020. Chainlysis estimates that crypto addresses linked to illicit activities currently hold some $10 billion.