The crypto transactional volume grew by 567% in 2021 and reached unprecedented levels as well so let’s take a closer look at today’s analysis and altcoin news.
The COVID-19 pandemic and the excess liquidity on the market got some new users with BTC and other cryptocurrencies becoming stores of value and gateways to new financial services. The reports from Chainalysis show a 567% increase as volume grew when compared to 2020 in crypto transactional volume for the past year. This metric stood at $15.8 trillion and suggests the adoption of crypto is moving faster than ever before. The company also noted an increase in crypto illicit activity that reached an all-time high in 2021 with more addresses being linked to crime and receiving up to $14 billion in 2021. this represents a 50% increase when compared to 2020 when the metric stood at $7.8 billion:
(…) Given that roaring adoption, it’s no surprise that more cybercriminals are using cryptocurrency. But the fact that the increase was just 79% — nearly an order of magnitude lower than overall adoption — might be the biggest surprise of all.”
In that sense, with the growth of legitimate use cases for crypto, the percentage of trading volume related to illicit activity was actually never been lower. As it can be seen from the charts, the metric has been in a sharp decline since reaching an all-time high in 2019 with a 3.37% until last year it recorded a 0.15%:
“we have to caveat this figure and say that it is likely to rise as Chainalysis identifies more addresses associated with illicit activity and incorporates their transaction activity into our historical volumes.”
The company also claimed that the percentage of crypto total trading volume for crypto crime changed in the past as they identify the addresses with links to crime and bad actors. In 2020, the initial percentage was 0.34% and then changed to 0.62%. As chainalysis clarified, 2020 was a great year for criminals as the PlusToken Ponzi Scheme was uncovered. This contributed to the increase in the year’s metric but still, the company believes that crime is becoming a smaller part of the crypto ecosystem.
Most of the illicit activities were supported in the decentralized finances sector between 2020 and 2021. during this time, DEFI protocols experienced a 1,964% increase in money laundering activities. The reduction could be attributed to the evolution of law enforcement methods that deal with bad actors using crypto. However, the company still considers $14 billion in illicit transactions as a cause for concern. The report claims that most of the value came from massive appreciation in the price of crypto coins in 2021 and not because of a rise in criminal activity. Chainalysis said:
“We believe it’s important for law enforcement agencies to understand these estimates as they build out their blockchain-based investigative capabilities, and especially as they develop their ability to seize illicit cryptocurrency.”
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