Scams Dominate Crypto Crime Report 2019

Ritika Sharma
Ritika Kumari Sharma is an Economics Honors graduate from the University of Calcutta. She is completely into finance and believes that cryptocurrencies are the future. She is an enthusiast learner about the cryptocurrency and blockchain technology.
  • The infamous reputations of cryptocurrency are the use of the blockchain-based platforms for scams and other criminal activity ranging from terror funding to money laundering.
  • Cryptocurrency, unlike traditional currency, records every transaction in a publicly visible ledger.

One of the infamous reputations of cryptocurrency is the use of the blockchain-based platforms for scams and other criminal activity ranging from terror funding to money laundering.

However, the current trend of crypto adoption by the general public is instrumental in recovering from this image of being a platform for criminals. In the last year, 18% of all Americans and 35% of Americans millennials have purchased cryptocurrency.

Further, mainstream financial institutions, including JP Morgan, have given a nod of approval to the crypto coins. Amazon and Starbucks top the list of retailers who now allow payments through bitcoins.

In spite of all these positive trends for the crypto industry, its inherent decentralized and semi-autonomous nature has made it challenging to evade the reputation of being used for criminal activity. Cryptocurrency, unlike traditional currency, records every transaction in a publicly visible ledger.

Thus, with proper tools, one can explore the association of crypto activity with crime and understand the types of crimes that dominate the system. This information is precious for law enforcement agencies to stop the abuse of the ecosystem and protect vulnerable people.

Chain analysis has conducted a study to understand the aspects of crypto crime in 2019. The results are as follows: A whopping total of $11.5 billion worth cryptocurrency transactions found to be associated with criminal activity in just one year.

Though the amount seems vast, the association with illegal activity represents only 1.1% of total crypto activity. The graph describes the various crypto crimes- Terror Financing, Stolen Funds, Scams, Sanctions, Ransomware, Darknet markets, Child abuse materials, and their share towards crypto activity since 2017.

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