Illicit Activity’s Share in Crypto Shrinks, 'Significant Problem' Remains

cryptonews.com:

The growth of legitimate crypto usage is far higher than that of illicit usage, according to blockchain analysis company Chainalysis. However, illicit activity is still “a significant problem.” 

“Transactions involving illicit addresses represented just 0.15% of cryptocurrency transaction volume in 2021 despite the raw value of illicit transaction volume reaching its highest level ever,” said Chainalysis.

It’s likely that this figure will rise, said the team, as they continue to identify more addresses associated with illicit activity, adding their transaction activity into Chainalysis’ historical volumes. As an example, the company said that their last Crypto Crime Report found 0.34% of 2020’s cryptocurrency transaction volume associated with illicit activity. However, that number has been raised to 0.62%.

What Chainalysis noted is that crime within crypto is a shrinking section, stating:

“Still, the yearly trends suggest that with the exception of 2019 — an extreme outlier year for cryptocurrency-based crime largely due to the PlusToken Ponzi scheme — crime is becoming a smaller and smaller part of the cryptocurrency ecosystem.”

The report further noted that while crypto-based crime hit a new all-time high last year, seeing illicit addresses receive USD 14bn, up from USD 7.8bn in 2020, it stressed that the adoption has grown too. Per the company, crypto usage is growing “faster than ever before,” with total transaction volume across cryptoassets tracked by Chainalysis growing to USD 15.8trn in 2021, up 567% compared to 2020.

Per Chainalysis,

“[T]he fact that the increase [in cybercriminals using crypto] was just 79% — nearly an order of magnitude lower than overall adoption — might be the biggest surprise of all. In fact,