10h00 ▪
3
min read ▪ by
Eddy S.
A new study reveals that only 0.3% of crypto transactions are reported as illicit, contradicting the popular belief that cryptocurrencies are primarily used for criminal activities. This report, published by the Crypto Information Sharing and Analysis Center (CryptoISAC) in collaboration with Merkle Science, highlights the increased security and transparency of crypto transactions compared to traditional financial systems.
Crypto: a safer means of transaction than expected?
Despite the rise in popularity of cryptocurrencies, criminals continue to prefer cash for their illicit transactions. According to the report, between 2% and 5% of global GDP is laundered through traditional financial systems each year, representing between $800 billion and $2 trillion. In comparison, only 0.34% of crypto transaction volumes were flagged as potentially illicit in 2023, down from 0.42% in 2022.
One of the main advantages of cryptocurrencies is their transparency. Transactions carried out on the blockchain are immutable and public, which allows for increased traceability. Crypto exchanges in the United States are subject to strict regulations, including know-your-customer (KYC) and anti-money laundering (AML) rules, making it more difficult to keep transactions anonymous.
Even stablecoins, often used to protect illicit gains from volatility, are rarely involved in illicit transactions. Between July 2021 and June 2024, only 0.61% of transactions involving Tether (USDT) and 0.22% of those involving Circle (USDC) were flagged as potentially illicit.
International collaboration and security
The report also calls for international collaboration to alleviate national security concerns, as much of illegal cryptocurrency activity takes place on offshore platforms not subject to the same restrictions as those in the United States.
In sum, although cryptos have been stigmatized as tools for criminal activity, data shows that they are actually used less for illicit transactions than traditional financial systems. This increased transparency and traceability may well make cryptocurrencies a safer and more reliable means of transaction in the future.
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Eddy S.
The world is evolving and adaptation is the best weapon to survive in this undulating universe. Basically a crypto community manager, I am interested in everything directly or indirectly related to blockchain and its derivatives. In order to share my experience and raise awareness of a field that fascinates me, there is nothing better than writing articles that are informative and relaxed at the same time.
DISCLAIMER
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.
