How large is the problem though? What is the share of illegal transactions? And are crypto transfers as hard to trace as many think they are? Let’s look at some figures.
Crypto crime in numbers
It turns out this myth is easy to bust: the value of crypto transfers made by criminals is tiny compared to the total volume of crypto transactions. According to Chainalysis, in 2019, the former was as low as 2.1%, dropping to 0.34% the following year. The current AML/CFT requirements can explain the drop: only about 1% of all crypto transactions go through non-regulated exchanges, while the other 99% are subject to the same regulations as traditional financial companies and banks.
A curious fact: if you look at the graphs in the above-mentioned article, you will see the share of the money received by scammers significantly dropped over that year, while the percentage of the dark market transactions saw a slight increase.
What we can discern about crimes that involve crypto
Besides that, it would be a mistake to think that crypto adoption by criminals is happening faster than in the non-criminal world. Yes, some tech-savvy malefactors saw the opportunity and took it – but the majority still prefer good ol’ cash. And for a good reason: it turns out that crypto is way easier to track than cash.
Today, investigators have access to open-source tools (like Blockchain explorer), which, coupled with proper analysis tools, allow them to track illegal cash flows and use the latest analytics to solve crimes that otherwise may have been unsolved.
So no, dear crypto skeptics, the ill fame of crypto is undeserved – and as reasonable regulations get developed and more widespread, we can expect the rate of illegal transfers to drop even more.
What was your attitude to crypto when you first heard about it? Did it change over time?