Less Than 1% of Bitcoin’s Activity Is Criminal, New Study Shows

A study published by the Foundation for Defense of Democracies reveals that under 1% of Bitcoin transactions are of an illicit nature.

A memorandum written by the Center on Sanctions & Illicit Finance for the Foundation for Defense of Democracies reveals information that contradicts the perspective that Bitcoin is a cryptocurrency chiefly used by criminals.

Using Elliptic’s foreign analysis tool, which peeks through blockchain data looking for addresses known to belong to criminals, researchers found that a grand total of 0.61% of all Bitcoins around the world are used for these types of activity.

Europe had an unusually high rate of illicit transactions, at 0.77%, while North America had a much smaller rate, sitting at 0.26%.

“Our study, the first of its kind, indicates that while most types of conversion services have received some Bitcoins from illicit activity, the vast majority of the funds they receive do not appear to be illicit. However, two types of services in particular—mixers and online gambling services—do receive a high proportion of illicit Bitcoins and thus, are significant concerns for Bitcoin laundering,” the study concluded.

Its findings also show that illicit Bitcoins overwhelmingly circulate through darknet websites such Alphabay and Nucleus Market.

“What we know about Bitcoin’s illicit use is mainly based on anecdotal evidence, usually without supporting data, analysis of how it is used across geographical regions, or trends over time,” the study read.

This perception is what led people like the chairman of France’s stock market regulator to say that Bitcoin is a “dangerous illusion” and a tool for criminals.

Europol Executive Director Rob Wainwright, on the other hand, said that 2018 would mark the end of Bitcoin as a cryptocurrency used by criminals.

He asserted that in this year we would shift “towards criminal use of cryptocurrencies other than Bitcoin, making it generally more challenging for law enforcement to counter.”

Wainwright’s perspective is more in line with the outcome of this study, which focused chiefly on Bitcoin.

Criminals in the cryptocurrency world will continue to exist, but they certainly won’t be in a hurry to use Bitcoin, especially when countries around the world are working to rein in exchanges operating in this space.