According to the latest data from Chainalysis, the total value of cryptocurrencies received by illicit addresses grew to a new all-time high of $14 billion in 2021. Although a new all-time high was double the $7.8 billion recorded in 2020. , representing only 0.15% of the volume of cryptocurrency transactions in 2021.
Low percentage of money sent to illegal addresses
The value of cryptocurrency-related crime recorded in 2021 soared to a new all-time high of $14 billion, nearly double the $7.8 billion received by so-called illicit addresses in 2020. However, this increase In the latest Chainalysis data, the value of funds transferred to illicit addresses is still well below the average growth of the crypto economy.
In a recent blog post that breaks down the $15.8 trillion crypto-economy transaction volume for 2021, blockchain analysis firm Chainalysis asserts that the growth in the value of money diverted to illicit addresses is not an indication that criminals are now in control of the space. Alternatively, this growth may be a hint at the extent to which the cryptocurrency economy has expanded in 12 months.
To clarify, the blog post notes a 567% growth in the volume of cryptocurrency transactions, which the analytics firm links to the growing adoption of cryptocurrencies. Chainalysis also offers its view on the growing gap between the volume of illicit activity and the legitimate volume:
In fact, with the growth of legitimate use of cryptocurrency far outstripping the growth of criminal use, the share of illicit activity in the volume of cryptocurrency transactions has never been lower.
Crypto crime hinders adoption
To back up its position that the share of illicit activity in the volume of cryptocurrency transactions is dwindling, Chainalysis points to data showing that crime-related addresses account for only 0.15% of volumes in 2021. This figure is down from the 0.62% recorded in 2020 and 3.37% registered in 2019.
Despite noting the low percentage of criminal cryptocurrency transfers compared to overall transaction volumes, Chainalysis still acknowledges that “cryptocurrency criminal abuse creates huge barriers to continued adoption.” The publication argues that such abuses often “increase the potential for restrictions by governments and, worst of all, to fall victim to innocents around the world”.
The blog post also suggested that law enforcement agencies are becoming more adept at fighting crypto-based crime. He cites the indictment of several crypto investment frauds by the US Commodity Futures Trading Commission (CFTC) as well as the Office of Foreign Assets Control (OFAC) sanctioning two cryptocurrency exchanges in Russia.
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