It’s no longer news that crypto criminals are cashing out daily. With reports of hacks still pretty much as rampant as they were years ago, this illicit industry keeps getting stronger.
However, little details are shared on how these criminals convert the tokens into fiat or what they spend their loot on. This week, we got a glimpse of what goes on behind the scenes.
Rising illegal Transaction Levels
What we do know is that crypto criminals have spent over $500 million since the year started and this figure could balloon up even further, per reports from Bloomberg.
Citing statistics from blockchain analytics firm Chainalysis, the news outlet reports that the use of Bitcoin for illegal activities could be as high as $1 billion this year. For usage, criminals have been spending a lot of these coins on the Darknet, as Bitcoin remains the preferred means of payment for illegal purchases.
However, while this report is quite bleak, it would be worth mentioning that it actually shows a decline in illicit crypto-related activities. Per the report, there is a reducing level of crypto spent on illicit activity especially in comparison to clean tokens. Hannah Curtis, the company’s Chief Executive, revealed that just 1 percent of total Bitcoin activity is illegal, down from about 7 percent in 2012.
Stepped up efforts from Law Enforcement
One of the most significant contributions to this reduction is undoubtedly the wave of Dark Net takedowns which have ensued over the past couple of years. Just this year, notable illicit Bitcoin and Dark Net-focused platforms have ceased operations after crackdowns from various local and international law enforcement agencies.
Bestmixer, one of the most popular “coin tumblers” on the Internet, was taken down, as reported by Blockonomi. Per a press release from Europol, Bestmixer was reportedly mixing count which had criminal origins and/or destinations, while also working with money launderers and traffickers to hide their loot and obscure them from potential trackers.
Another popular Darknet platform that was shut down recently was the Wall Street Market, one of the most popular e-commerce platforms on the Internet sub-section.
The crackdown of the Wall Street Market was a collaborative effort between Europol and the German Federal Criminal Police. In a press release on the matter, Europol revealed that the platform had over a million registered users. The majority of its users were involved in fraudulent activities such as stolen data, drugs, malicious software, and forged documents.
In addition to the progress that has already been made, there is also some hope on the horizon concerning the ability of law enforcement to track asset movements and curb theft.
Last month, the Financial Action Task Force (FATF) released a raft of guides and recommendation as regards of exchanges should treat customer information.
Per the report, exchanges should ensure that information on every transaction (including the details of the senders and the recipients) and submit this information to beneficiary institutions. The enforcement of this condition will mean that exchanges and other asset custodians would need to clearly identify their customers, and perhaps could see them introduce additional Know-Your-Customer (KYC) standards as part of their signup processes.