Crypto crime’s overall impact set to fall even further in 2022: Chainalysis

cointelegraph.com:

The coming year is likely to see crypto related crime reduce to an ever smaller share of the overall industry as law enforcement takes greater advantage of the transparency provided by blockchain technology, says Kim Grauer, Director of Research at Chainalysis. 

According to a January 6 report from Chainalysis, the growth of legitimate cryptocurrency usage is “far outpacing the growth of criminal usage.” The share of cryptocurrency transaction volume associated with illicit activity has never been lower, representing just 0.15% of transaction volume in 2021.

She told Cointelegraph that barring any “outlier criminal events,” she expected that the growth of legitimate crypto usage over illegitimate usage would continue to accelerate through 2022.

She said that things are looking hopeful in the space as “the illicit share of transaction volume continues to fall” and “the narrative that crypto is primarily a means for criminals to transact is finally being put to bed.”

During 2021, rug pulls became crypto-criminals' scam of choice. Scamming revenue rose 82% in 2021 to $7.8 billion, with over $2.8 billion of this total coming from rug pulls alone.

However, Grauer said that this doesn’t necessarily indicate rug pulls will remain the most prevalent scam during 2022. Rather, criminals are likely to “abuse newer technologies” like DeFi, NFTs and DAOs as the space moves towards web3.

Additionally, Grauer suggested that while she didn't expect a potential crypto bear market would affect the rate, or type, of crypto crime, a major financial recession or depression could.

“When you consider overall economic markets — not just crypto — recessions and depressions can drive an increase in criminal activity,” she said.

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