Only 0.15% of the Total Crypto Transaction Volume is for Illicit Activities
The growth of legitimate cryptocurrency usage far outpaces the growth for criminal usage. Last year, the illicit activity’s share of cryptocurrency transaction volume hit its lowest percentage ever.
Legitimate Usage of Cryptocurrencies Continue to Grow
A recent report by Chainalysis has revealed that the legitimate usage 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 activities.
Chainalysis said the total transaction volume grew to $15.8 trillion in 2021, up 567% from 2020’s totals. The 0.15% recorded last year was the lowest ever. In 2019, the figure stood at 3.37%, while in 2020, it was 0.62%.
The reduction in the percentage of illicit transactions comes despite the cryptocurrency market experiencing massive adoption last year.
Chainalysis said the figure could rise as it continues to identify more addresses associated with illicit activity. For instance, 2020’s initial figure was 0.34%, but it was later revised upwards to 0.62% after discovering more illicit transactions during its research.
DeFi Scams Lead the Way in Crime Growth
Chainalysis mentioned two major cryptocurrency illegal activities and revealed their percentage growth over the past year. The first group is scamming, with scamming revenue rising by 82% in 2021. A total of $7.8 billion worth of cryptocurrencies were stolen from victims last year.
The report said more than $2.8 billion of the $872 billion came from rug pulls. A rug pull is a malicious maneuver in the cryptocurrency space where the developers abandon a project and run away with investors’ funds.
The second group is cryptocurrency theft, which saw a 516% increase compared to 2020. $3.2 billion worth of cryptocurrencies was stolen from victims last year. Of this amount, approximately $2.2 billion were stolen from DeFi protocols. In 2021, fraud and theft at decentralized finance platforms surpassed $10 billion.
DeFi Protocols recorded the highest growth in terms of being used as tools for money laundering. DeFi-related money laundering grew by nearly 2,000% last year. The other tools criminals use for money laundering in the crypto space include; mining, mixing, using high-risk exchanges, unnamed services, gambling, P2P exchanges, and more.