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'Drop in the Ocean': CoinShares on Crypto Usage in Financial Crime

Wed, 08/30/2023 - 17:15
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Vladislav Sopov
Digital assets manager CoinShares yet again busts myth about crypto as instrument of choice for money laundering
'Drop in the Ocean': CoinShares on Crypto Usage in Financial Crime
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Adamant cryptocurrency critics have always insisted that digital assets are used for ransom processing or money laundering. CoinShares debunks these concepts and explains how crypto makes the global remittances system healthier and more hostile to criminals.

No, cryptocurrency isn't good for money laundering and scams

In the record-breaking year of 2022, the net volume of cryptocurrency received by illicit addresses was estimated at $20 billion. Meanwhile, the volume of fiat money used for money laundering might be 40x-100x higher, CoinShares reports in its latest Quantifying Crypto Crime: Expectations vs Data thesis.

The sum of $20 billion includes potential revenues from the sale of child abuse materials, scams, fraud, terrorism financing, sanctions circumvention and so on. This number was first mentioned by leading Web3 forensics and security firm Chainalysis.

CoinShares experts stressed that the very nature of blockchains is not suitable for large illegal operations as the decentralized networks can be easily supervised due to their transparency:

The transparency of public blockchains is actually one of the key benefits of cryptocurrencies for law enforcement agencies. Blockchain analytics companies like Chainalysis and Elliptic specialise in tracing cryptocurrency transactions and have helped law enforcement agencies to find criminals who use Bitcoin and other cryptocurrencies for nefarious means.

As covered by U.Today previously, modern trackers can identify the all history of funds movements after major scams and hacks. Everyone can track the processes of laundering, exchanging and withdrawing illicit funds to prevent interacting with them.

Crypto covered only 0.0075% of global cybercrime proceeds

The situation with ransomware and cybercrime-related transfers looks pretty much the same for analysts. While the net revenue of cybercriminals might exceed $6 trillion per year, cryptocurrency is only responsible for $450 million of these funds.

CoinShares experts noted that all crypto involved in the facilitation of cybercrimes is equal to only 0.55% of Bitcoin (BTC) trading volume.

Even cryptocurrency mixers like Tornado Cash can be useful in seeking the organizers of cybercrimes. For instance, Chainalysis managed to recover some funds stolen by North Korea hackers through such services.

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About the author

Blockchain Analyst & Writer with scientific background. 6+ years in IT-analytics, 3+ years in blockchain.

Worked in independent analysis as well as in start-ups (, Monoreto, Attic Lab etc.)