BTC No Longer Used Too Much for Illicit Activities

The latest report by Chainalysis dubbed “The 2022 Crypto Crime Report: Original data and research into cryptocurrency-based crime” shows some positive developments in the crypto realm.

According to the company, which describes itself as a research group paving the way for a global economy built on blockchains, the illicit share of all cryptocurrency transaction volume during the period of 2017-2021 has dropped significantly. 

Peaking at 3.37% in 2019, it lowered to just 0.15% in 2021.

The authors admit that the figure has to be adjusted and “is likely to rise as Chainalysis identifies more addresses associated with illicit activity and incorporates their transaction activity into our historical volumes”. Yet, they also emphasize that 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.”

They add that law enforcement’s capacity to combat crime related to crypto is evolving, referring to several examples such as the 2021 CFTC filing charges against several investment scams. The FBI’s takedown of the REvil ransomware strain and OFAC’s sanctioning of Suex and Chatex, the two Russia-based cryptocurrency services involved in money laundering, are likewise mentioned.

In other parts of the report, the authors touch upon the rogue nations’ use of cryptocurrency for sanction evasion. Among them is Iran, which possibly resorts to Bitcoin mining, as a way to circumvent heavy restrictions. 

“As one of the world’s largest energy producers, Iran has the low-cost electricity needed to mine cryptocurrencies like Bitcoin cheaply, providing an injection of monetary value that sanctions can’t stop,” the report reads.

Russia, which launched a full-scale war against Ukraine in 2022, is likewise home to several cryptocurrency businesses that have processed substantial transaction volume from illicit addresses. 

“Chainalysis is tracking several dozen cryptocurrency businesses operating in Moscow City alone that facilitate significant amounts of money laundering,” the authors write.

They include Garantex, Buy-bitcoin, Bitzlato, Eggchange, Tetchange, Suex. Garantex, for example, received $645,223,700 from illicit and risky sources.

Previously, The Coinomist reported that the European Union continues to fight against crypto-based money laundering.