Out of $1 Trillion In Crypto Transactions, Only 1.1% Were Used In Illicit Activities: Chainalysis
- Less than 1% of the total cryptocurrency transactions sets in 2019 proved illicit activities, Chainalysis reports.
- Centralized exchanges remain the top crypto destination for new accounts and new crypto entering the market.
According to the Chainalysis report on March 5th, over $1.01 trillion USD in cryptocurrencies were transferred in 2019, setting an all-time high. While the crypto field has heavily been blamed for promoting illicit activities and terrorism across the world, the fears may be exaggerated as less than 1% of these transactions were actually illicit, centralized crypto exchanges taking the bulk of the transactions.
The huge value of transactions comes in light of the increasing adoption of blockchain wallets. Over the last four quarters, the recorded number of blockchain wallet users soared from 34.66 million wallets in Q1 2019 to over 44 million at the end of the year.
A cleaner cryptocurrency market
At the start of the cryptocurrency frenzy, a huge percentage of the wallets were used for illicit purposes and to circumvent government rules. The rise of darknet markets accepting Bitcoin (BTC) soared as the industry came to light.
However, as adoption and regulation starts to become stricter, the field has seen fewer darknet markets, according to the Chainalysis report. Earlier in the year, the cybersecurity firm reported only 0.08% of total crypto transactions to originate from darknet markets. This shows that cryptocurrency is maturing and becoming cleaner as illicit activities die out.
Exchanges, cybersecurity firms, and government authorities have come together to clamp down on hackers, illegal activities and money laundering across the industry.
Exchanges collect over 58% of the newly mined BTC
Centralized exchanges have become the favorite avenue for users to stash their mined cryptocurrencies, as they look for profits to keep on their activities. According to the report, centralized exchanges currently receive 58.4% of the newly mined coins with mining pools receiving 15.1% and 12.7% landing on high-risk exchanges (unregulated).
While the industry grows and more of the tokens pass through centralized exchanges, the value transacted for illicit activity will continue to drop given the tough AMLD and KYC regulations the crypto exchanges are subjected to.