Is cryptocurrency worth its shady reputation? – Report

“What, you trade crypto? Are you crazy, they are only used for illegal things like fraud, money laundering and cybercrime? ”

It’s a question we’ve all heard. But is it really so?

The value of illicit crypto transactions has increased by an unbelievable 80% year-over-year, according to Chainalysis’s annual crypto crime report. Examples include fraud, darknet crime, and money laundering.

In 2020 it is 7.8 billion dollars, in 2021 it will reach 14 billion dollars. Alas, cryptocurrency scams still make up the majority of all fraudulent activity.

Fraud can take many forms. Twitter user @Zeneca_33 posted this example with some wise advice: “A good rule in the crypto space, never click on links.”

Sadly, the example above is a particularly convincing example of a scam. If the user does not verify the link, he will lose his ETH.

Other scammers are simply inventing the whole project to swindle money from investors. More well-known examples include Onecoin, Bitconnect, and Bitclub Network.

Darknet, Terrorism and Money Laundering

While scams account for the majority of illicit activity, criminals also use exchanges to launder $8.6 billion – up 30% year-over-year but down from all-time highs. great in 2019.

Darknet activity also set a new record, raking in more than $2.1 billion. Of this, an estimated $300 million came from rogue stores, which sold stolen logins, credit cards, etc. The remaining $1.8 billion was generated from the drug market. .

As for the possible darknet markets, Chainalysis says competition is fiercer than ever, and these competitors are poised to play dirty.

Data leaks, DDoS attacks and doxxes are common occurrences in space, according to Ian Gray, Flashpoint Senior Research Director.

Hydra, a marketplace that only serves Russian-speaking countries, remains the largest darknet marketplace by far, accounting for 80% of worldwide market revenue. Among its suspicious activities, drugs account for the majority of sales.

Stick to Fiat – It’s Much Safer Than Crypto

It is estimated that cybercriminals have laundered over $33 billion in cryptocurrencies since 2017, mainly on centralized exchanges. For comparison, the United Nations Office on Drugs and Crime estimates between $800 billion and $2 million in fiat money laundered each year.

In other words, the amount of global money laundered through cryptocurrencies accounts for only 0.05% of total transaction volume.

And of course, the transparent nature of blockchain makes it easy to track how cryptocurrencies move between wallets and how funds are transferred to cash.

Also, the sad truth is that our fiat holders often commit the biggest crimes. For example, US bank Bancorp had to pay the US government $613 million in 2018 for non-compliance. money laundering tutorial. The bank was unable to recognize a large number of unauthorized transactions and was found guilty and fined.

By far, however, the biggest scandal that actually occurred involved a drug cartel. HSBC Bank was fined $1.9 billion for collaborating with the Sinaloa cartel, one of the bloodiest drug cartels in Mexico. Incidentally, not a single manager was arrested or punished by the responsible managers.

Why DeFi is very popular with money launderers

Chainalysis also mentioned the popularity of drag mats in the DeFi area. Rug pull means developers withdraw money from the project. They have two options for this: a backdoor integrated into the smart contract or all tokens sold by the team.

DeFi trading volumes have grown by 912% in 2021, and with the right technical skills you can get them listed on exchanges, even without a code check. Code checking confirms the project’s governance rules and is performed by a third party.

Chainalysis notes that many investors could have avoided losing money on carpet pulling if they had stuck to DeFi projects that had already undergone token checks – or if DEXes required token checks before listing tokens. newspaper.

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