Cryptocurrency And Crime. Which Coins Are Most Commonly Used By Criminals

Pappi Hex

One of the most common arguments of cryptocurrency opponents is the use of digital assets by criminals. But is this really the case?

Cryptocurrency has been around the world for more than 10 years. As of today, the market capitalization of the digital asset market is around $0.9 trillion, and there are more than 16,000 different coins traded on 447 exchanges in different countries.

These are impressive numbers for a new financial instrument but are still far from being the most visible part of the global economic pie.

Despite this, the issue of cryptocurrency regulation remains problematic for many countries. Opponents of digital assets believe that the anonymity and decentralization provided by blockchain technology allow cryptocurrencies to be used for criminal purposes.

Let's find out if this is true and which cryptocurrencies are considered the most popular among criminals.

Fact check

Coinbase published a list of the most common stereotypes and myths about cryptocurrencies, as well as facts that level them.

Among the propagators of these stereotypes was U.S. Treasury Secretary Janet Yellen, who said that cryptocurrencies are used to launder the proceeds of online drug dealers and are also a tool for financing terrorism.

In fact, as of the end of 2021, illegal activity in the cryptocurrency community accounts for less than one percent of all transactions. And between 2017 and 2020, most economic crimes were committed using traditional financial instruments.

The most popular criminal activity in the world of cryptocurrency is not money laundering, human trafficking or terrorist financing, but the trivial theft of the same cryptocurrency from other users.

By tampering with legitimate sites and taking possession of users' personal information, scammers simply transfer other people's digital assets to their wallets. Quite often this is done by teenagers.

Another popular myth is that there are more crimes involving cryptocurrency than cash. However, according to the United Nations (UN), every year fraudsters only launder $1.6 trillion in illicit funds, which is 66% of the market capitalization of all cryptocurrencies.

But cryptocurrency can't be traced, right?

Because of the decentralization and anonymity that blockchain technology guarantees, some users may also believe that their cryptocurrency transactions cannot be traced.

But this is not true, and crypto crimes are investigated by international security services just like any other economic crimes.

For example, the FBI recently investigated the theft of 3,800 bitcoins that belonged to a Sony subsidiary. Digital assets worth the equivalent of $180 million were allegedly stolen by a company employee.

Sony Life Insurance Company Ltd. employee Rei Ishii was found guilty. Using the company's financial accounts, Ishii transferred $154 million to his California bank account. He then converted the money into bitcoins.

In addition to U.S. law enforcement officials, the investigation involved the National Police Agency of Japan, the Tokyo Metropolitan Police Department, the Office of the Public Prosecutor of Japan, as well as representatives from Sony and Citibank.

You cannot rely on cryptocurrency to hide your illegally obtained funds from law enforcement. The U.S. is actively coordinating with international partners to prevent crimes and recover stolen funds», said Acting U.S. Attorney Randy Grossman.

Anonymous coins

A large role in the use of cryptocurrency by criminals is also played by the level of anonymity of its blockchain.

For a long time, Monero (XMR) token, based on CryptoNote protocol, has been considered the "king" of anonymity among all cryptocurrencies. The creators of the project initially talked about the increased confidentiality of transactions through the use of circular signatures and hidden addresses.

As of today, Monero is 29th in the list of cryptocurrencies by market capitalization, and the rate of this coin is around $124.

Among other anonymous coins, experts also highlight Dash (DASH), Horizen (ZEN), Verge (XVG), and Beam (BEAM). But all of them are clearly outside the list of the most popular cryptocurrencies. 

Incidentally, the creators of the Dash were once forced to rebrand the coin (formerly Darkcoin) in order to clear themselves of the dubious reputation of a financial instrument for illegal transactions on the Darknet. Since August 2016, the use of Dash on all major trading platforms of the "shadow internet" was discontinued.

Following Monero is Zcash, a once-successful cryptocurrency that has fallen significantly in price over the past few years. The Zerocash protocol, on which this cryptocurrency is based, is a more confidential alternative to bitcoin.

In 2017, Edward Snowden said that Zcash (ZEC) could compete with bitcoin, and Europol officially expressed concern about the spread of the coin.

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