Cash remains the preferred medium for illegal activities, while blockchain transparency reduces the criminal use of cryptocurrencies.
A report by the nonprofit organization Crypto Information Sharing and Analysis Center (ISAC) reveals that in 2024, cash continues to be the dominant means in illegal activities globally, surpassing cryptocurrencies. Despite initial associations between cryptocurrencies and crime following events like the birth of Silk Road, criminal activities involving cryptocurrencies have decreased.
The results show that only 0.34% of cryptocurrency transactions in 2023 were flagged as potentially linked to illicit financing.
The document highlights that criminals prefer cash over cryptocurrencies due to the inherent transparency of blockchain technology. As noted by Robert Whitaker, co-author of the report, unlike cash, cryptocurrency transactions are permanently recorded on a public ledger, allowing law enforcement to review and trace transactions. This trail can be followed, contrary to the anonymity and physical nature of cash, which complicate tracking efforts.
Last February, the U.S. Department of Treasury reached the same conclusions, stating in a report:
“The use of virtual assets for money laundering remains far below that of fiat currency and more traditional methods.”
Decline in cryptocurrency-related crimes
As reported by Fortune, the research indicates a reduction in crimes involving cryptocurrencies. According to the authors, this change is attributable to stricter regulations such as Know Your Customer (KYC) and Know Your Transaction (KYT) procedures, which help authorities monitor potential illegal activities through exchanges.
The report highlights that some high-profile crimes, including sanctions evasion, continue to heavily rely on cash.
