The amount of illicit activity in cryptocurrencies is actually miniscule, new research says

Here's a lesson on being very, very, very, very, very, very, very out of the way. Last year, testifying before the Senate, US Treasury Secretary Janet Yellen suggested that cryptocurrency transactions were used "primarily for illicit financing."

The riddle of cryptocurrencies

But according to new research released Thursday, the amount of cryptocurrency transactions involving illicit activity isn't just tiny, it's practically microscopic - only 0,15% of all cryptocurrency transactions in 2021 were related to activities such as cybercrime. money laundering and terrorist financing, a much lower percentage of fiat currency.

There is no doubt that the use of cryptocurrencies skyrocketed last year - there were $ 15,8 trillion in cryptocurrency transactions made, up from $ 2,4 trillion in 2020. a handful of high-profile legal cases involving cryptocurrencies - the Commodity Futures Trading Commission has filed charges against several scams of investment, the FBI dismantled the REvil ransomware gang demanding crypto payments from its victims, and the Office of Foreign Assets Control sanctioned two Russian cryptocurrency services, Suex and Chatex, for money laundering ties. This has led politicians and regulators to demand stricter rules to govern emerging blockchain-powered financial instruments.

A tiny number!

But the study by data company Chainalysis concluded that those high-profile cases represent a declining share of all business, which was already very small to begin with:

Since 2017, the share of crypto transactions involving illicit activities has dropped from 1,4% to 0,15%, suggesting that crime has progressively decreased in the crypto economy (the only exception was 2019, when the Ponzi PlusToken scheme $ 2 billion in China created an anomalous year).

The total volume of cryptocurrency-based crime hit a crude numeric high of $ 14 billion in 2021, up from $ 7,8 billion in 2020, but the growth in legitimate use is leaving it in the dust.

What about normal money? Compared to traditional cash, crypto transactions seem like a virtual moral compass. The United Nations estimates that 2% to 5% of global GDP ($ 1,6 to $ 4 trillion) annually is linked to money laundering and illegal activities.