This week, JPMorgan CEO Jamie Dimon cited money laundering, fraud, tax evasion and sex trafficking as key uses of Bitcoin. This assessment is typical for all fierce opponents of digital assets who consider the latter to be a tool used by criminals.

However, a chain analysis of transactions of addresses flagged as suspicious by law enforcement suggests otherwise. Yesterday, the Chainalysis analytics agency released a report in which criminal activity accounted for just 0.34% of total transaction volume.

In absolute numbers, $24.2 billion worth of illegal transactions were made using cryptocurrencies in 2023.

Of these, 61.5% of transfers worth $14.9 billion were made to evade sanctions. These are mostly addresses flagged by the US Treasury Department's Office of Foreign Assets Control (OFAC). This category grew significantly in 2022, when Russia rose to first place in terms of the number of international sanctions applied.

In terms of 'traditional' illegal activities, such as the use of malware or fraud, there has been a decline in transaction volumes since 2021. In 2023, the volume of the above-mentioned category decreased by 29.2%, while the volume of hacking attacks dropped by 54.3%.

Some pretty interesting changes also occurred in terms of cryptocurrency preferences. Up to and including 2021, Bitcoin accounted for most illegal transactions. Since 2022, however, it has ceded that title to stablecoins. The latter were mostly used to evade sanctions.

The recent claims by the UN Office on Drugs and Crime against Tether can be summed up as follows:

Law enforcement and financial intelligence authorities in East and Southeast Asia have also reported USDT [or Tether] among the most popular cryptocurrencies used by organised crime groups...

Tether criticised the UN agency, hinting at its insufficient competence:

The UN's analysis ignores the traceability of Tether tokens and the proven record Tether has of collaborating with law enforcement.

The company has repeatedly noted that it promptly blocks suspicious addresses upon receiving the first official request from law enforcement agencies. Currently, 1254 addresses that hold a total of $878 million are included on the stop list. 

StormGain Analytical Group 
(platform for trading, exchanging and storing cryptocurrency)

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