Crypto Crime Reaches All-time Low in Share of All Cryptocurrency Activity

Cryptocurrency-based crime hit a new all-time high in 2021, with illicit addresses receiving $14 billion over the course of the year, up from $7.8 billion in 2020.

But those numbers don’t tell the full story. Cryptocurrency usage is growing faster than ever before. Across all cryptocurrencies tracked by Chainalysis, total transaction volume grew to $15.8 trillion in 2021, up 567% from 2020’s totals. Given that roaring adoption, it’s no surprise that more cybercriminals are using cryptocurrency.

However, the fact that the increase was just 79% — nearly an order of magnitude lower than overall adoption — might be the biggest surprise of all. 

In fact, with the growth of legitimate cryptocurrency usage far outpacing the growth of criminal usage, illicit activity’s share of cryptocurrency transaction volume has never been lower.

Transactions involving illicit addresses represented just 0.15% of cryptocurrency transaction volume in 2021 despite the raw value of illicit transaction volume reaching its highest level ever. 

Despite the exception of 2019 — an extreme outlier year for cryptocurrency-based crime largely due to the PlusToken Ponzi scheme — crime is becoming a smaller and smaller part of the cryptocurrency ecosystem.

Law enforcement’s ability to combat cryptocurrency-based crime is also evolving. We’ve seen several examples of this throughout 2021, from the CFTC filing charges against several investment scams, to the FBI’s takedown of the prolific REvil ransomware strain, to OFAC’s sanctioning of Suex and Chatex, two Russia-based cryptocurrency services heavily involved in money laundering. 

Source: Chainanalysis