Percentage of Crypto Used for Illicit Activities Have Reduced – CipherTrace


The crypto industry is known for many things and fraud or illicit activities are generally one of them. Without factoring in the current slump in the digital currency ecosystem which has ushered in a combined market capitalization below $1 trillion, the industry has grown on several key levels.

Despite this bullish growth, a recent research analysis from CipherTrace has shown that the percentage of the total volume of digital currencies being used for illicit activities has drastically reduced.

CipherTrace went further to define the scope of the growth, noting that from January 1, 2019, where the market size was pegged at $135 billion, the industry has experienced a 1,456% increment to $2.1 trillion as of the 31st of March this year.

The CipherTrace estimates project that a total of $590 million were made in ransomware payments in the first half of 2021, up 42% over the same period in 2020.

These payments, according to the data analytics and security startup account for 0.62% to 0.65% of the total transaction volume as of 2020 and by 2021, the percentage has declined to 0.10% to 0.15% respectively.

CipherTrace Says Data are Mere Estimates

CipherTrace, despite its intelligence, acknowledged that the bulk of fraudulent or illicit activities in the crypto ecosystem is generally undetected. As a result, it said its shared data should be considered as mere estimates.

“Even with all that growth, most blockchain analysis suggests that illicit activity, as a percentage of total activity, declined in 2021 (compared to 2020). To caveat, the fact remains that not all illicit activity is known whether that’s in traditional financial channels, in crypto, or in other informal value transfers. So, take any numbers you see from us or others with that perspective in mind,” the research update reads.

Overall, the platform, acquired in October 2021 by financial services giant Mastercard said the bulk of illicit activities have moved onto Decentralized Finance (DeFi), Non-Fungible Tokens (NFTs), and next-generation mixing services respectively.

This accounts for why the US Treasury banned, the mixing service that was allegedly used by the Lazarus crime group for laundering the proceeds of the Ronin Bridge hack.

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