A study by blockchain analysis company Chainalysis found that crimes related to cryptocurrencies have been greatly reduced. By 2020, the share of crime in all cryptocurrency activities has fallen to only 0.34%. This contradicts the recent statements made by the nominee of the US Treasury Secretary Janet Yellen and European Central Bank President Christina Lagarde that cryptocurrencies are mainly used for illegal financing.

Crypto crime drops sharply in 2020

Chainalysis shared some of its findings in its 2021 crypto crime report this week. The blockchain analysis company acknowledged that “due to its pseudonymous nature and the convenience that it allows users to send money immediately anywhere in the world, cryptocurrencies are still attracting criminals”, the blockchain analysis company detailed:

The good news is that crimes related to cryptocurrency have been greatly reduced in 2020… In 2020, the share of crimes in all cryptocurrency activities has fallen by only 0.34%, which is a transaction volume of 10 billion US dollars.

In contrast, the company explained that in 2019, “criminal activity accounted for 2.1% of all cryptocurrency transactions, or transfers worth approximately $21.4 billion. The company pointed out that last year, “one reason for the decline in the proportion of criminal activity was that overall economic activity almost tripled between 2019 and 2020.”

In 2020, crypto crime has dropped sharply, accounting for only 0.3% of all cryptocurrency activity
The chart shows the total encrypted value sent and received by criminal entities and the criminal share of all encrypted activities. Source: Chainalysis

Chainalysis pointed out that the dark web market is the second largest crime category. It accounts for $1.7 billion worth of cryptocurrency activity, which is an increase from last year’s $1.3 billion. Ransomware accounts for only 7% of all funds received by criminal addresses and is worth less than $350 million in cryptocurrency. Although small in scale, the number of ransomware has increased by 311% compared to 2019.

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Chainalysis’s findings contradict the latest statement by Joe Biden’s selection of US Treasury Secretary Janet Yellen and ECB President Christine Lagarde. Yellen said on Tuesday that many cryptocurrencies are “mainly used for illegal financing.” At the same time, Lagarde said last week that Bitcoin “has carried out some interesting business” and “completely condemned money laundering activities”.

Some people in the crypto industry pointed out the errors in their statements, including the famous economist, who called Lagarde’s statement “outrageous.” He emphasized: “We all know that the vast majority of money laundering activities in the world are carried out in legal tender, especially the U.S. dollar and the euro.”

What do you think of the decline in the crime rate of digital currencies? Let us know in the comments section below.

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