Only 0.15% of all crypto transactions had criminal connections in 2021: Report

Total cryptocurrencies transaction volume surged remarkably in 2021

Key Takeaways

  • Total cryptocurrencies transaction volume grew to $15.8 trillion in 2021.
  • Criminal activity using crypto is much smaller than fiat currency, says UN.

LAGOS ( — Chainalysis, a blockchain data firm, has disclosed that the legitimate usage of cryptocurrency in 2021 far surpasses its illegal usage.

According to the blockchain data firm, illicit activities made up just 0.15% of all cryptocurrency transaction volume last year. This data debunk claims that cryptocurrency is mostly used to facilitate criminal and other illegal activities.

Illicit share of all cryptocurrency transaction volume (2017–2021). Source: Chainalysis
Illicit share of all cryptocurrency transaction volume (2017–2021). Source: Chainalysis

Janet Yellen, United States Secretary of the Treasury, had recently issued warnings and expressed concerns about cryptocurrencies. She indicated that digital currency is a major source of concern for criminal activity and terrorist financing.

Similarly, European Central Bank (ECB) president Christine Lagarde had expressed contempt towards cryptocurrencies, branding them as “suspicious.” Lagarde further noted that cryptos are not currencies, and central banks will likely never adopt them.

However, discrediting Lagarde and Yellen’s narrative on cryptocurrencies, Chainalysis data revealed that people use digital assets for lawful transactions way more than for illicit activities.

Moreover, when comparing Chainalysis data since 2019, we see that the illicit share of all cryptocurrency transaction volumes has dropped significantly.

Clearing false narratives

Although Chainalysis data disclosed that illicit crypto transactions hit a new high of $14 billion in 2021, it will, however, be wrong to make that assertion without taking a look at the full picture.

The overall transaction volume of cryptocurrencies monitored by Chainalysis grew by a whopping 567% in 2021. So naturally, this growth invariably prompted the rise of illicit activities in the crypto industry. But when we compare the growth of digital assets and the number of illicit transactions, we will see that only a fraction of crypto activities are illicit.

The United Nations revealed that between 2% and 5% of global GDP ($800 billion – $2 trillion) annually is connected with money laundering and illicit activity. That indicates that crypto-enabled criminal activities are much smaller than fiat currency globally.

War against crypto

Chainalysis in the report further highlighted ways law enforcement agencies are combating the massive increase in crypto crimes. For example, the blockchain data platform noted that law enforcement agencies seized illicitly obtained cryptocurrency.

According to reports, America’s Internal Revenue Service criminal investigation (IRS-CI) seized over $3.5 billion worth of cryptocurrency in 2021. Similarly, the U.S. Department of Justice (DOJ) also seized $2.3 million worth of cryptocurrency from the operators of DarkSide ransomware, responsible for the attack on Colonial Pipeline.

Meanwhile, London’s Metropolitan Police Service (MPS) seized £180 million worth of cryptocurrency from a suspected money launderer. And an undisclosed amount of crypto was seized by Israel’s National Bureau for Counter Terror Financing in a case related to terrorism financing.

Also, the U.S. recently arrested and charged Ilya Lichtenstein and Heather Morgan for allegedly conspiring to launder stolen cryptocurrency.

Chainalysis, Only 0.15% of all crypto transactions had criminal connections in 2021: Report

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