Politics

Illicit crypto transactions hit a record high last year

By VINCENT OWINO

Cryptocurrency-based crimes hit a file excessive in 2021, with illicit transactions rising 79.4 p.c to $14 billion, from $7.8 billion in 2020.

A report by American cryptocurrency market analysis agency Chainalysis says laundering of stolen funds via cryptocurrencies and scamming of customers have been the best crimes final yr, accounting for over half of the illicit transactions.

Crime on the rise

Different crypto crimes that elevated embody financing of terrorism, ransomware, cash laundering of kid abuse materials funds, cybercriminal administration and fraud retailers.

Nonetheless, illicit transactions on complete cryptocurrency transactions dropped from 0.62 p.c in 2020 to 0.15 p.c in 2021.

Transactions elevated by 567 p.c in the identical interval, to $15.8 trillion.

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Warning

Elevated prison exercise within the crypto house echoes alarms sounded by the Worldwide Financial Fund in its World Monetary Stability report launched in October final yr, which highlighted the specter of cryptocurrencies to world economies.

In line with the IMF, the main challenges with cryptocurrencies are cyber-risks that expose customers to hacking and lack of their belongings, and governance dangers that “involve the lack of transparency around issuance and distribution of crypto assets”.

In 2021, the Chainalysis report revealed that the best threat areas in crypto crime have been North Korea, Russia, and Iran. Hacking, ransomware, and sanction-evasion transactions respectively elevated considerably up to now yr.

In East Africa, there have been no notable illicit crypto transactions.

“As cryptocurrency continues to grow, it is imperative that the public and private sectors work together to ensure that users can transact safely, and that criminals can’t abuse these new assets,” the Chainalysis report acknowledged.

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