Only 0.15% of total crypto transaction volume is for illicit activity

The growth in legitimate use of cryptocurrency far exceeds the growth in criminal use. Last year, the share of illicit activity in cryptocurrency trading volume hit its lowest on record.

Legitimate use of cryptocurrencies continues to grow

A recent report from Chainalysis revealed that the legitimate use of cryptocurrencies far outweighs their illegal use. The report pointed out that only 0.15% of the total cryptocurrency transaction volume last year was for illicit activity.

Chainalysis said total trading volume reached $ 15.8 trillion in 2021, up 567% from 2020 totals. The 0.15% last year was the lowest on record. In 2019, that figure stood at 3.37%, while in 2020 it was 0.62%.

The reduction in the percentage of illicit transactions comes despite the massive adoption of the cryptocurrency market last year.

Chainalysis said the figure could increase as it continues to identify more addresses associated with illicit activity. For example, the original 2020 figure was 0.34%, but it was later revised up to 0.62% after discovering more illicit transactions during his research.

DeFi scams pave way for growth in crime

Chainalysis mentioned two major illegal cryptocurrency activities and revealed their percentage of growth over the past year. The first group is the scam, with scam revenue increasing 82% in 2021. A total of $ 7.8 billion in cryptocurrency was stolen from victims last year.

The report says more than $ 2.8 billion of the $ 872 billion came from carpet prints. A carpet draw is a malicious maneuver in the cryptocurrency space where developers abandon a project and flee with investor funds.

The second group is cryptocurrency theft, which has seen a 516% increase from 2020. $ 3.2 billion in cryptocurrency was stolen from victims last year. Of that amount, around $ 2.2 billion was stolen from DeFi protocols. In 2021, fraud and theft on decentralized financial platforms exceeded $ 10 billion.

DeFi protocols have seen the strongest growth in terms of use as money laundering tools. DeFi-related money laundering increased by almost 2,000% last year. Other tools that criminals use for money laundering in the crypto space include: mining, mixing, using high-risk exchanges, nameless services, gambling, P2P exchanges, etc.

Sara H. Byrd