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Crypto-Related Crime Revenue Fell by 53% in 2020

  • Crypto crime fell by 53% in 2020 due to increasing regulatory compliance by crypto exchanges.
  • Crypto criminals got away with $5 billion less in 2020 than they got away with in 2019.
  • Scams have decreased even more rapidly with total volume, falling from 2.1% in 2019 down to just 0.34% last year.

2020 was an incredible year for cryptocurrency, despite the devastation brought by the worldwide Covid-19 pandemic. Bitcoin has shattered its previous price records, primarily driven by the increase that many in the cryptocurrency community have long speculated would take the asset to new heights.

However, cryptocurrency remains appealing for criminals due to its pseudonymous nature. It allows users to instantly send funds anywhere in the world, despite its clear and visible design. But the great news is that cryptocurrency-related crime dropped by 53% in 2020.

In 2019, illicit activity represented 2.1% of all cryptocurrency transaction volume or roughly $21.4 billion worth of transfers. In 2020, all cryptocurrency activity’s illegal share fell to just 0.34%, or $10.0 billion in transaction volume.

The percentage of illicit activity dropped because overall economic activity nearly tripled between 2019 and 2020.

According to the Chiinalysis report, 2019’s illicit share of cryptocurrency activity is 1.1%. The change is the classification of more addresses associated with the illegal activity that was active in 2019.

Most of the addresses were related to scams that had yet to be identified, primarily associated with the PlusToken fraud. Some are related to earlier unreported ransomware attacks. For that reason, we should expect 2020’s reported illicit activity numbers to rise over time as well.

Regardless, the good news is three-fold:

  • Cryptocurrency-related crime is falling.
  • It remains a small part of the overall cryptocurrency economy.
  • It is comparatively smaller than the number of illicit funds involved in traditional finance.

However, both the immature value and share of all criminal activity caught by scams are much smaller than in 2019. There were no scams in 2020 compared to those like the enormous, which took over $2 billion from millions of victims.

However, the critical story for cryptocurrency-based crime in 2020 is ransomware. Combining pre-existing ransomware fights accounted for nearly $350 million of cryptocurrency theft.

Calev Ford

A Computer Engineering graduate who writes news focuses on cryptocurrency-related and blockchain technology. He is enjoying using his skills to contribute to informing people of the exciting technological advances that happen every day.

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