Cryptocurrency used for illicit activities no longer Bitcoin: TRM Labs

Bitcoin No Longer Primary for Illicit Finance Activities

New research indicates that cybercriminals are no longer relying on Bitcoin as the primary means of transferring illegal funds, instead opting to utilize fiat channels or other cryptocurrencies.

TRM Labs, a digital asset compliance and risk management company, published its “Illicit Crypto Ecosystem Report” on June 28th, which revealed that illicit finance activities involving Bitcoin (BTC) had decreased significantly in the past seven years.

TRM Labs declared that the introduction of a new multichain era has caused a “qualitative leap” away from Bitcoin being the primary way of transferring criminal profits. They also mentioned that cash and other forms of fiat-based finance still remain the “default” method for criminal money movements.

TRM Labs emphasized that while illegal activities involving cryptocurrency have risen, “cryptocurrency did not create these criminal activities.”

The company stated that in 2022, around $2 billion worth of cryptocurrency was lost due to attacks on cross-chain bridges, but only a small fraction of that was Bitcoin.

“The advent of multi-chain technology has had a dramatic effect on the spread of illegal crypto transactions,” the report stated, further noting that Bitcoin’s portion of illicit activity dropped from 97% in 2016 to just 19% in 2022.

In 2016, two-thirds of crypto hacking incidents involved Bitcoin, but by 2022, this had dropped to only 3%. Ethereum accounted for 68% of cases, while BNB Smart Chain accounted for 19%, according to the report.

Back in the day, Bitcoin was commonly used for terrorist financing; however, by 2022, it had been almost completely supplanted by Tron, according to a report from TRM Labs which stated that Tron accounted for 92% of terrorist financing.

TRM Labs states that in 2022, there was a 240% rise in the utilization of Tether (USDT) among the terror financing organizations that it monitored.

DeFi Services Used for Money Laundering by Criminals and North Korea

The recent figures on illicit finance in cryptocurrency could be a positive sign for Bitcoin, which appears to be gaining traction in the institutional market again recently.

In 2022, a total of $7.8 billion was reportedly paid into Ponzi and pyramid schemes, $1.5 billion was spent on darknet markets for narcotics, and $3.7 billion was stolen through DeFi hacks and exploits, according to TRM Labs.

Criminals and North Korea are taking advantage of DeFi services for money laundering.

Earlier in 2021, Cointelegraph reported that the amount of cryptocurrency sent to illicit addresses had set a new record, totaling over $20 billion, according to analytics firm Chainalysis.

William Clemente III predicts that Bitcoin will reach six figures by the end of 2024, according to Hall of Flame magazine.