Criminal Activity in Crypto Transactions Fell Sharply in 2020, Says Chainalysis

19 January 2021

Cryptocurrency investigation firm Chainalysis said cryptocurrency-related crime fell significantly in 2020 but remains appealing for criminals due to its anonymous nature.

  • Chainalysis reports in 2020, cryptocurrency criminal activity fell to 0.34%, or $10.0 billion in transaction volume, compared with 2019, when criminal activity represented 2.1% of all transaction volume or roughly $21.4 billion worth of transfers.
  • One of the reasons for the decline is due to overall economic activity nearly tripling between 2019 and 2020, but still the overall amount of cryptocurrency-related crime is falling, and is an even smaller part of the cryptocurrency economy, said the firm.
  • Chainalysis highlighted scams were much smaller in 2020 compared to the enormous PlusToken Ponzi scheme in 2019, which took in over $2 billion from millions of victims.
  • The majority of the cryptocurrency-related scams, around 54%, were made up of illicit activity followed by darknet markets which was the second-largest crime category, accounting for $1.7 billion worth of activity, up from $1.3 billion in 2019.
  • Chainalysis said the “big story” for cryptocurrency-based crime in 2020 is the rise of ransomware which, while only accounting for 7% of all funds received by criminal addresses at just under $350 million worth of cryptocurrency, was up 311% from 2019. The number of ransomware incidents could even be higher due to the low reporting rate, the firm said.
  • Covid-19 pandemic has forced more people to work-from-home and in turn this has opened up new vulnerabilities to ransomware attacks for many organizations, said the firm.

Read more: Alt-Right Groups Received $500K in BTC Month Before Capitol Riot: Chainalysis

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