CipherTrace: Criminalization of digital assets has decreased over the past year

Cryptocurrency and blockchain security company CipherTrace said the tightening of regulation is helping to reduce illegal transactions and does not hinder the growth of the industry.

According to report CipherTrace, the percentage of illegal cryptocurrency activity in 2021 and Q1 2022 has decreased. If in 2020 the indicator ranged from 0.62% to 0.65% of the total cryptocurrency activity, then in 2021 it fell to 0.10% -0.15%.

Analysts noted that the ten largest hacks of DeFi projects in 2021 and the first quarter of 2022 brought $2.4 billion to attackers. More than half of this amount is accounted for by a cyber attack on the Ronin Network at the end of March (about $650 million) and a Poly Network hack in August 2021 ($610). million). Note that most of the stolen assets were returned by an anonymous hacker.

At the same time, there is a discrepancy between the rate of criminalization of the industry and its growth. According to CipherTrace, the total activity of the cryptocurrency market in 2020 was about $4.3 trillion, and in the first half of 2021 it grew to about $16 trillion. One of the reasons may be that the growth of the crypto market entails increased attention from global regulators. They are “starting to take decisive action to make sure the crypto space is not just a modern day Wild West.”

According to analysts, the most important events for the industry were the March executive order of the President of the United States on the study of the industry, the adoption of a law in Dubai on the regulation of cryptocurrencies and the laws proposed by the European Union to combat money laundering. CipherTrace added that crypto companies have a “real chance to recover” or face even “greater losses from the actions of the authorities.”

At the same time, in Russia in 2021, the number of litigations involving cryptocurrencies has significantly increased. The indicator was 1,531 cases, which is 40% more than in 2020.