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Cash beats crypto for illegal activities


Cash is still by far the most popular way for criminals to do their illegal business, despite an increase of illicit crypto transactions. Approximately 0.08 percent of all cryptocurrency transactions came from dark web sellers offering drugs, stolen creditcards or other illegal services. This data comes from blockchain analytics firm Chainalysis.

Many people often associate bitcoin and other crypto with illegal activities, but in 2019 less then one-tenth of percent of all crypto transactions came from the dark web. If we include cryptocurrency related crimes like scams, hacks and fake services, the number of illicit transactions increases to 1.1 percent.

Last year products sold on the dark web for cryptocurrencies had a revenue of 600 million dollars. That’s considerably more than the 450 million dollars from 2018. At the same time the dark web’s share of the overall cryptocurrency transactions doubled. The number of transactions increased 30 percent to twelve million, while most of these transactions were approximately 30 dollars.

Providing perspective

It sounds like the dark web is a nasty place with lots of illegal activity powered by crypto. But let’s put things in perspective. We’re talking about 0.08 percent of all transactions, and only 1.1 percent of all crypto transactions is connected with anything illegal. That basically means that 99 percent of all crypto transaction is legal and legit.

When it comes to cash, two to five percent of the worldwide GDP is being money-laundered. That’s an amount somewhere between 800 billion and two trillion dollars. We don’t count theft, selling stolen goods, or running an illegal drug imperium. Drug trafficking has a yearly revenue between 436 and 652 billion dollars. Even in organ trafficking there’s more illegal money then in cryptocurrency dark web sales, at least 840 million dollars according to a 2017 report.

In the end cash is hard to trace, unless you put a transmitter inside a duffel bag. However, most cryptocurrencies are relatively easy to follow around. There are plenty of cases where the police followed bitcoin transactions. They would follow the transaction from the online sale, to an exchange and that leads them to an identity. Blockchain technology allows for more transparency in the flow of value. My point is, cryptocurrencies aren’t that bad and we should stop treating them as such.

  • The percentage of cryptocurrencies involved in real world illegal activities is smaller than that of cash.
  • The transparency is cryptocurrencies makes it (often, but not always) possible to trace money. This can potentially lead to arrests.

My two cents

I chose the title of this article as a reaction to the way online blockchain media have been reporting this report. Maybe I’m too bullish on crypto, but there’s no need to push the agenda of ‘old money‘ in an effort to give crypto a negative image. Providing perspective is something that’s definitely needed among blockchain media. It’s easy to copy and paste this press release from Chainalysis, but people expect and deserve more.

Why is nobody comparing the numbers of dark web transactions with other crime numbers? What about the connection with illegal shootings? Maybe there has been an increased amount of sales in weapons through the dark web? Drug sales? Cyber crime? Earlier reports already suggested that money laundering hardly happens with bitcoin.

Earlier reports suggested that most of the dark web sales come from malware and ransomware. Ransomware-as-a-Service has become a viable business model for hackers who don’t want to do the hacking themselves. The same can be said about other types of malware. How’s that for perspective? Blockchain-oriented media should do better.

Also published on Medium.

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