Chainalysis: The share of crypto transactions associated with criminal activity fell dramatically in 2020

The "criminal" share of all cryptocurrency activity fell to 0.34% ($10 billion) in 2020 — much lower than its share of 2.1% (21.1 billion) last year, according to new data from Chainalysis.

Source: Chainalysis

THE SCOOP

Keep up with the latest news, trends, charts and views on crypto and DeFi with a new biweekly newsletter from The Block's Frank Chaparro

By signing-up you agree to our Terms of Service and Privacy Policy
By signing-up you agree to our Terms of Service and Privacy Policy

According to the analytics firm, one reason for the large decrease is that total cryptocurrency-based economic activity grew three-fold from 2019 to 2020.

Another factor is that Chainalysis underestimated the number of active addresses linked to criminal conduct in 2019. That's because so much of the criminal activity that occurred in 2019 wasn't identified till later, including activities connected to the China-based PlusToken Ponzi scheme.

In July of 2020, China's government said that it had finally arrested all 27 major suspects alleged to be behind the multi-billion dollar scam.

Chainalysis notes that 2020’s current crypto crime statistic of 0.34% could increase over time for the same reason.  Still, the firm emphasizes that crypto crime is decreasing as a portion of the total crypto economy.

About Author

MK Manoylov has been a reporter for The Block since 2020 — joining just before bitcoin surpassed $20,000 for the first time. Since then, MK has written nearly 1,000 articles for the publication, covering any and all crypto news but with a penchant toward NFT, metaverse, web3 gaming, funding, crime, hack and crypto ecosystem stories. MK holds a graduate degree from New York University's Science, Health and Environmental Reporting Program (SHERP) and has also covered health topics for WebMD and Insider. You can follow MK on X @MManoylov and on LinkedIn.