No, cryptocurrencies are not widely used by criminals

Cryptocurrencies are not the preserve of criminals and hackers. A new study shows that criminal activities represent only a tiny part of transactions.

According to a study by CipherTrace, a company specializing in the analysis of blockchains owned by Mastercard, the share of cryptocurrency transactions linked to criminal activities continues to collapse. In 2021, illicit activities accounted for only between 0.10% and 0.15% of all transactions stored on networks.

In 2020, criminal activities, such as money laundering or drug trafficking, still represented between 0.62% and 0.65% of the sector’s overall activity. Despite the explosion of the market, and the gradual adoption of crypto-assetsthe share of transactions carried out by criminals is shrinking year after year.

Increase in amounts related to criminal activities

Several studies point in the same direction. chain analysisanother firm specializing in blockchain analysis, believes that the activities in violation of the law represented barely 0.15% of the total amount transactions in 2021, compared to 0.34% in 2020 and 2.1% in 2019.

In parallel with the fall in volumes, the sums collected by pirates reached a new record last year. According to Chainalysis, the hackers released 14 billion dollars in cryptocurrencies in 2021up 79% from 2020. The amounts stolen have simply increased as the market has grown. “Given the adoption, it’s no surprise that more and more cybercriminals are using cryptocurrency”explains Chainalysis.

For the record, the crypto-asset market has gone beyond the $3 trillion capitalization in November 2021. Since then, the cryptocurrency sector has contracted sharply. Falling UST, declining interest in NFTs, and falling Bitcoin price reduced market valuation. In recent days, market capitalization has plummeted below $1 trillion, mimicking traditional markets.

NFTs in the sights of hackers

Mirroring Chainalysis, CipherTrace points the finger the rise of decentralized finance (DeFi) and NFTs to explain the explosion of amounts stolen. In recent months, many DeFi protocols, these financial applications theoretically devoid of trusted third parties, have been hacked. Examples include the Poly Network, BadgerDAO, Crypto.com or Ronin Network hack. $3.2 billion worth of cryptocurrencies were stolen in 2021, compared to $162 million in 2020, Chainalysis notes.

Several NFT collections have also been targeted by hackers. By hacking the Discord account of the Bored Ape Yacht Club (BAYC), a very popular collection, attackers recently managed to steal 32 digital works worth over $200,000. A few weeks earlier, 91 tokens non-fungible items from the collection were stolen. The criminals hacked into the project’s Instagram account to achieve their ends.

Cautious, CipherTrace tempers the results of his study. “Not all illicit activity is known, whether in traditional financial channels or in cryptocurrency”says the firm, adding that the situation is the same in traditional finance.

Source :

CipherTrace

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No, cryptocurrencies are not widely used by criminals


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