- Chainalysis crypto crime report finds that crime involving cryptocurrencies dropped 84% in 2020
- $10 billion worth of volume was connected to illicit activity, representing just 0.34% of all crypto volume
- The Chainalysis crypto crime report also finds that ransomware increased four-fold in 2020
Chainalysis has reported that criminal activity made up just 0.34% of cryptocurrency trades in 2020, a drop of 83.8% from 2019. The finding, part of the Chainalysis 2020 Crypto Crime Report, found that criminal activity involving cryptocurrencies fell from 2.1% the previous year, marking an $11.4 billion reduction, although ransomware cases surged, with revenue from the practice increasing four-fold. The news should go some way to addressing the concerns of those who believe that cryptocurrency is only used by criminals, but the likelihood is that the report will either be ignored by mainstream media outlets or will be cherry picked to reinforce agendas.
Crypto Crime Drops to 0.34% of Volume
The Chainalysis crypto crime report has been running since 2017, with 2019 being the biggest year since then for crimes involving cryptocurrencies. That year, criminal use of cryptocurrency hit $21.4 billion in transfer volume, a number that dropped to $10 billion in 2020. Chainalysis puts this down in part to a move away from ‘traditional’ cryptocurrency-based activity such as hacks as well as a dramatic increase in legitimate trading activity in 2020.
The Chainalysis crypto crime report found that scams took up the biggest percentage of crypto crime types, followed by darknet market use. Nevertheless, the money taken from scams was drastically lower than in 2019, partly due to the collapse of the PlusToken scam, which raked in billions of dollars by itself between 2019 and 2020.
Report Will Not Ease Regulator Concerns
Despite the good news that crypto crime is reducing overall, if media outlets focus on anything from the report it will likely be the $10 billion worth of illegal activity that was carried out by criminals in 2020 rather than the 84% decline. Several high profile decision makers have commented on the need to regulate cryptocurrencies in recent weeks, including Janet Yellen and Christine Lagarde, and they could use reports like this as evidence that the crypto sector still needs tougher regulations.
