The development of cryptocurrencies will lead to the transparency of blockchains and the flow of illegal transactions into traditional payment services, experts of the analytical company Gartner predict.
Gartner, in its 2022 forecast titled “Preparing for a Blockchain-Based Digital Breakthrough”, claims that the number of illegal cryptocurrency transactions will decrease in two years:
“By 2024, the number of successful cryptocurrency thefts and ransomware payments will decrease by 30% due to the inability of criminals to move and spend funds outside the blockchain.”
The authors of the document draw conclusions based on their observations of the trends that are now successfully developing in the cryptocurrency market. Blockchains are more transparent than traditional payment services and allow more effective detection of illegal transactions, the authors explain their logic.
By 2022, approximately 23 platforms will account for about 99% of the market capitalization of all blockchains on the planet. That is, effective fraud protection systems must be integrated with only 23 fully transparent platforms, and not with thousands of corporate systems and payment networks.
There are a growing number of analytics companies such as Chainalysis, CipherTrace (part of Mastercard), Elementus or TRM Labs that provide data that allows law enforcement to identify hackers responsible for cyber attacks, block and confiscate stolen assets. Increasingly, DeFi exchanges and protocols are using fraud prevention software, analysts at Gartner say.
World governments have begun to pay more attention to cases of fraud with cryptocurrencies. Experts note: transactions that go through cryptocurrency service providers (VASPs) practically cannot be illegal – unlike transactions that go through their own wallets or not through VASPs.
The authors of the forecast emphasize that in the future it will be easier for attackers to launder money through numerous non-transparent legacy payment services than through transparent and relatively few well-protected blockchains.
According to Chainalysis, an analytics company, in 2020, the share of cryptocurrency transactions related to illegal activities has significantly decreased – from 2.1% in 2019 to 0.34% in 2020. At the end of 2021, the National Bureau of Economic Research (NBER) posted a report refuting the information that 46% of the volume of transactions in bitcoin are associated with illegal activities. Analyst company Elliptic and the Massachusetts Institute of Technology (MIT) in 2019 investigated more than 200,000 transactions on the Bitcoin network for their connection with criminal activity. And they concluded that only 2% of transactions meet these criteria.
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