According to forensic company CipherTrace, illegal crypto activity in 2021 and the first quarter of 2022 has decreased as a percentage of total crypto activity.
The cryptocurrency industry has long had a reputation in some jurisdictions as a safe haven for illicit activity. However, CipherTrace estimates that illegal activity accounted for between 0.62% and 0.65% of total cryptocurrency activity in 2020. The firm said it has now fallen to 0.10%-0.15% of total activity in 2021.
In its cryptocurrency crime and anti-money laundering Report CipherTrace, published on June 13, reported that the top ten decentralized finance (DeFi) hacks in 2021 and the first quarter of 2022 netted $2.4 billion to attackers.
More than half of this comes from two events, the largest of which is the approximately $650 million Ronin Network exploit at the end of March 2022 and the $610 million Poly Network hack in August 2021, most of which was returned by an anonymous hacker.
Over the same time period, the number of money laundering (AML) related fines in the banking sector increased dramatically, with 80 institutions fined in 2021 compared to 24 in 2020, according to the data. kikr.
Although the total amount of fines in dollars has decreased compared to 2020, last year banks paid out $2.7 billion in fines for violations related to AML or Know Your Customer (KYC), with the largest fine amounting to about $700 million. dollars.
Despite significant amounts involved in cryptocurrencies, CipherTrace detailed the rapidly expanding crypto ecosystem, noting that total crypto market activity in 2020 was around $4.3 trillion, rising to around $16 trillion in the first half of 2021 alone. dollars.
CipherTrace says that the growth of the crypto market is also attracting increased scrutiny from global regulators, who are “starting to take decisive action to make sure this space is not just a modern Wild West.”
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Some of the most important regulatory developments cited in the report include US President Biden’s March executive order to explore blockchain technology, the creation of a virtual asset regulator in Dubai, and the European Union’s proposed anti-money laundering laws.
CipherTrace added that organizations would have “a very real incentive to bounce back” or face “big losses at the hands of the government,” adding that the threats that exist in cryptocurrencies will be the focus of future regulatory efforts.
Credit : cointelegraph.com