Summary
A report by TRM Labs reveals that Bitcoin is no longer the top choice for criminals using cryptocurrency. In 2016, Bitcoin accounted for 97% of illicit crypto volume, but by 2022, its share had dropped to 19%. Ethereum and Binance Smart Chain now dominate the field. The shift highlights the need for policymakers to study specific assets and blockchains favored by illicit actors and develop appropriate regulations. This also demonstrates the fluid nature of financial crime and the importance of predictive systems to forecast future patterns of illegal fund flows. The changing usage of Bitcoin can also provide insights into organized crime syndicates and aid law enforcement in combating them. A more nuanced approach is needed in curating regulatory and policy frameworks for digital assets and blockchains.
Key Points
1. Bitcoin’s share of illicit crypto volume has significantly decreased over the years, from 97% in 2016 to 19% in 2022. Ethereum and Binance Smart Chain have emerged as the dominant choices for criminals, with 68% and 19% share respectively.
2. The shift away from Bitcoin challenges the perception that Bitcoin is synonymous with criminal activity. This highlights the need for policymakers to study specific assets and blockchains favored by illicit actors and shape policy narratives accordingly.
3. The displacement of illicit finance from Bitcoin showcases the fluid nature of financial crime and the need for predictive systems to forecast future patterns of illicit fund flows. This can help arm policymakers with timely information to combat new threats and minimize response time.