Criminals regularly use cryptocurrencies such as bitcoin or ether, that’s true. However, the share of cryptocurrencies linked to illegal activities is very low compared to the total volume, which has increased significantly.
Cryptocurrencies are often accused of being an El Dorado for criminals. However, the summary of a Chainalysis report published on January 6 allows us to strongly temper this idea.
The company, which specializes in the analysis of crypto transactions, reveals that in 2021, only 0.15% of them were linked to illegal activities. This is significantly less than in 2019: at that time, 3.37% of cryptocurrencies were made by actors involved in activities that were prohibited by law.
What this development above all shows is the spectacular development of the crypto market. Of course, criminals did not stop using cryptocurrencies last year. In 2021, the amounts received by illegal addresses have even increased: while the total amount amounted to $ 4.6 billion in 2017 and $ 11.7 billion in 2019, it increased to $ 14 billion in 2021.
But the legal transactions have increased, and incomparably more. ” The growth in legitimate use of cryptocurrencies so clearly exceeds the growth of criminal use that the share of illegal activities in cryptocurrency transactions 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 value. For example, a study by the National Bureau of Economic Research published in October 2021 estimates that 90% of transactions recorded on the bitcoin blockchain are not linked to ” specific economic activities, but is linked to the design of the Bitcoin protocol as well as the taste of anonymity of many participants. »
Thus, according to the authors of the study, many bitcoin users move their money to different addresses and fragment their payments so that their activities are less easy to track.
Despite this nuance to be taken into account, it is surprising, even reassuring, that cryptocurrencies associated with illegal activities are increasing so little compared to the way they are evolving in the legal field. Although 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 illegal crypto activities.
Crypto money laundering services sanctioned
In late 2021, for example, the FBI seized $ 2.3 million in cryptocurrencies linked to the REvil ransomware group. Chainalysis also discusses complaints filed by the CFTC, the U.S. stock exchange regulating agency, against fraud crypto and the sanctions imposed by the US Financial Services Authority (OFAC) on Suex and Chatex, ” two crypto services based in Russia and very active in money laundering “.
However, the fight against illegal crypto-activity must not be eased, as the prey of criminals in 2021 ($ 14 billion) remains high. The two categories of illegal activity that have seen their crypto looting increase the most in a year are fraud and “stealth funds”.
Cryptocurrency fraud and theft
Revenue from fraud involving cryptocurrencies increased 82% to $ 7.8 billion. A significant portion of these amounts come from what is called a rug sweater : a form of scam in which malicious developers make their victims believe that they are investing in a reliable crypto project and then run away with the money that their goals have contributed to the project.
This is especially what happened to the Thodex platform in April 2021: it abruptly stopped transactions, which prevented the characters who had invested in the project from withdrawing their money ($ 2 billion in total). The founder of Thodex is now wanted by the judicial authorities of his country, Turkey, for “gross 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% over 2020. Chainlysis estimates that crypto-addresses associated with illegal activities currently hold around $ 10 billion.