One of the main reasons why a lot of potential investors were afraid of betting on cryptocurrency was the risk of being victims of a scam and losing important amounts of money. In fact, throughout the years, there have been numerous cases of exchanges being hacked – Mt. Gox being the best example – and not being able to help users recover their investments.
However, it appears that 2020 was a great year from this point of view, as the cryptocurrency crime level fell to only 0.3% of all activity.
A big step of the road to crypto safety
According to a study released by blockchain analytics firm Chainalysis, the criminal share of the entire cryptocurrency activity fell to 0.34% last year, which roughly translates to $10 billion in transaction volume.
In contrast, 2019 registered a cryptocurrency crime volume of 2.1% of all transaction volume or roughly $21.4 billion in terms of transfers.
“One reason the percentage of criminal activity fell is that overall economic activity nearly tripled between 2019 and 2020,” Chainalysis revealed.
The dark web remains the main hotspot for cryptocurrency crime
The report claims that darknet markets were one of the main locations where such crimes happened, accounting for $1.7 billion of activity. Ransomware also accounts for 7% of the total of crypto-related crimes, totaling under $350 million worth of cryptocurrency. What’s interesting is that even though the value is small, it saw a 311% jump, compared to 2019.
All these values come in great contradiction with statements made by U.S. Treasury Secretary nominee Janet Yellen, as well as ECB President Christine Lagarde, who claimed that cryptocurrencies are mostly a shady way of financing.
Several big names from the crypto industry have pointed to errors in these statements, calling them “outrageous”.
“We all know that the vast majority of money laundering globally is conducted in fiat currencies, particularly in U.S. dollars and euros,” said Daniel Lacalle, fund manager and chief economist at Tressis Gestion.