Sometimes, the cryptocurrencies are mentioned as a tool for facilitating illegal criminal activities. Due to their decentralized nature and cryptographic security, the cryptocurrencies quickly earned this title. It is true that the cryptocurrencies can be used for money laundering, but it is not their only function and also not so popular.
According to the report published by the Foundation for Defense of Democracies (FDD) from the United States, the illegal activities related to bitcoin are just a minority in the cryptocurrency world.
The Foundation conducted an analysis of the flow of illegal money through the cryptocurrency exchanges around the world and came to the conclusion that only a small part of the transactions are related to illegal criminal activities.
Tom Robinson, Dr. Phil and Yaya Fanusie, the researchers that participated in this analysis, said only 1% of all the bitcoin transactions in the cryptocurrency exchanges around the world are illegal. This means we are talking about a small number of “dirty” transactions in comparison to the large sums of money flowing through the blockchain networks every day.
In the last four year, only 0.61% of the money that passed through the cryptocurrency exchanges came from confirmed illegal sources. However, this percentage increased considerably in 2013, going up to 1.07% of all the transactions.
When it comes to geographical division, Europe is leading when it comes to illegal cryptocurrency activities. One fourth of the reported illegal transactions is coming from Europe, oscillating between 38 and 57% of the total movements in the network. This numbers cause great concerns when it comes to the financial security in Europe.
The researchers concluded by saying the governments and international companies should start thinking about new practices to prevent money laundering operations in the cryptocurrency world, in order to decrease even further the number of illegal transactions in the Bitcoin network.