Combating The Rise Of Illegal Crypto-Related Activities

Crypto-related crimes have been on the rise in 2018. Law enforcement agencies and financial regulators have begin to step-up scrutiny

Illegal Crypto Crimes

One of the main criticisms of cryptocurrencies is that it’s mostly used to finance illegal activities. Crypto fans will argue that its the same for fiat currencies too. However, financial regulators in most countries think different. They have often expressed concerns about the anonymity and pseudonymity digital currencies afford to criminals.


According to research conducted earlier in 2017, roughly one-quarter of Bitcoin users and one-half of Bitcoin activities are associated with an illicit venture. It says that around $72 billion of unlawful activity every year involves Bitcoin. That is close to the scale of the sale of illegal drugs in the U.S. and European markets.

Elliptic, a startup focused on analyzing criminal activities in cryptocurrencies, and the Center on Sanctions and Illicit Finance conducted a research in 2018 that showed a fivefold increase in the amount of large-scale illegal operations on the Bitcoin blockchain between 2013 and 2016. The organizations analyzed the history of more than 500,000 bitcoins and identified 102 criminal entities. They included dark-web marketplaces, Ponzi schemes, and ransomware/malware attackers.

Rise Of Illegal Crypto Crimes

Criminal Activities on the Blockchain

They also found that 95% of all the laundered coins came from nine dark-web marketplaces, including Silk Road, Silk Road 2.0, Agora and AlphaBay. Law enforcement agents are beginning to use sophisticated tools to detect illegal activities happening across blockchain networks easily. They often partner private security firms that have developed innovative solutions to track illegal activities.

For example, the Bitfury Group were able to trace the movement of Bitcoin from the Japanese Zaif exchange when it faces hack in September. Zaif had lost $60 million in crypto, with about 6,000 bitcoins.

According to Bitfury’s team, 30% of the stolen Bitcoins are still located at addresses related to the hacker. While another 24% transfers to Binance for exchange/withdrawal. It says the remaining 46% splits into small amounts and transfers to various addresses.

Combating The Rise Of Illegal Crypto Crimes and Activities

Physical Bitcoin Attacks and Burglaries

In addition to online hackers, crypto-related crimes have also been happening offline. Also, victims are under force for handing over cryptocurrency account details or face violent consequences.

The dramatic rise in physical Bitcoin theft and extortion catalogs by creator Jameson Lopp, earlier this year. He publishes a detail list of physical attacks targeting cryptocurrency holders on GitHub.

Home invasions of cryptocurrency holders have also risen. Five men are under arrest in Cumming. Georgia for planning an arms home invasion of a cryptocurrency investor in January 2018.

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Combating The Rise Of Illegal Crypto-related Activities
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Combating The Rise Of Illegal Crypto-related Activities
Crypto-related crimes have been on the rise in 2018. Law enforcement agencies and financial regulators have begin to step-up scrutiny
Feranmi Akeredolu
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Akeredolu Feranmi

Feranmi is a guest author at Coinpedia.

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