The year of 2021 witnessed global crypto expansion, but along came several cases of crypto-related crimes that dragged the sector under bad light. The criminal usage of cryptocurrencies will drop around the world, as more governments learn to take advantage of the uncensored transparency that blockchain offers, a new report claims. Blockchain is the underlying technology that supports cryptocurrencies. In its study, research firm Chainalysis has said that the growth of legitimate usage of cryptocurrencies is “far outpacing the growth of its criminal usage”.
Cryptocurrency-based crime hit a new all-time high in 2021, with illicit addresses receiving $14 billion (roughly Rs. 103,768 crore) over the course of the year, up from $7.8 billion (roughly Rs. 57,813 crore) in 2020.
“Across all cryptocurrencies tracked by Chainalysis total transaction volume grew to $15.8 trillion (roughly Rs. 11,71,09,600 crore) in 2021, up 567 percent from 2020's totals. Given that roaring adoption, it's no surprise that more cybercriminals are using cryptocurrency. But the fact that the increase was just 79 percent — nearly an order of magnitude lower than overall adoption — might be the biggest surprise of all,” the report said.
Transactions involving illicit addresses represented just 0.15 percent of cryptocurrency transaction volume in 2021.
Since crypto transactions are decentralised and untraceable in nature, several governmental authorities around the world have expressed concerns around the unlawful uses of crypto assets. From money laundering to terror financing, the potential misuses of the crypto sector has added to its delayed legalisation.
The report has further highlighted that law enforcement agencies have ramped up efforts to bust and stop the exploitation of the cryptocurrencies from criminals.
In November 2021, for instance, the US-based Internal Revenue Service (IRS) Criminal Investigations had announced that it had seized over $3.5 billion worth of cryptocurrency in 2021 — all from non-tax investigations. The number represented 93 percent of all funds seized by the division during that time period.
Regardless, the cryptocurrency market rose to $3 trillion (roughly Rs. 2,15,66,720 crore) in 2021, the highest it has even been so far.
In a report last year, Chainalysis had revealed that crypto related scams mooched off over $7.7 billion (roughly Rs. 58,697 crore) from investors in 2021.
Last year, the most common form of scam was the classic rug pull, that took in more than $2.8 billion (roughly Rs. 21,333 crore) worth of cryptocurrency from victims in this year.
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