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Elliptic estimates that Bitcoin transactions related to illegal activities have decreased sharply in 2020. This would be explained by a strengthening of regulatory measures on exchanges.
Bitcoin, a cryptocurrency at the service of crime? This has never been less true, according to a report by Elliptic, a startup specializing in blockchain analysis. The latter observes a break with regard to criminal use.
However, other uses of cryptocurrencies are developing. This is particularly the case with regard to speculation, notes Elliptic. “The majority of crypto is simply sent between two exchanges. The value of these transactions dwarfs anything related to crime,” comments its scientific director, Tom Robinson.
The pressure of the authorities and the practices of the exchanges also complicate the operations of laundering of cryptocurrency. In order to avoid it, criminals are developing new techniques.
“The most significant trend we have observed is the increasing use of privacy wallets such as the Wasabi Wallet in the laundering process. In 2020, at least 13% of all Bitcoin’s criminal proceeds were sent through privacy wallets, compared to only 2% in 2019,” notes the report.
This portfolio category thus played a role in the laundering of the most significant cybercriminal activities this year. This was for example the case in July after the Twitter scam campaign.
In September, more than 280 million dollars in crypto-actives disappeared from KuCoin, an Asian exchange. “The Wasabi Wallet was again used to help launder these funds,” says Elliptic.
Do these portfolios then become the target of choice for the authorities? Certainly, they make it “difficult to monitor the flow of illicit funds in the financing chain,” acknowledges the company.
However, “this does not necessarily make them an effective tool for money laundering,” she adds. Elliptic believes that tools such as its own allow exchanges to identify the use of these wallets by their clients.
Nevertheless, regulation seems to be getting tougher. The United States could thus impose more controls on transfers to self-custody wallets. In France, an ordinance opposes the anonymity of transactions in crypto-actives. The government would like to be able to systematically identify users.