Cryptocurrency Crime Estimates Examined

Alison Jimenez was quoted on cryptocurrency crime estimates in a recent article in MoneyLaundering.com. The article is titled “Cryptocurrency Research Firms Vastly Underestimate Illicit Payments, Critics Claim,” by Koos Couvee.

Alison Jimenez discussed several issues with the cryptocurrency crime estimates prepared and promoted by blockchain analytics firms.

Cryptocurrency Crime within Exchanges is Excluded

• “The vast majority of crypto transactions…occur within exchanges” while the cryptocrime estimates exclusively add up illicit transactions on the blockchain. Therefore, crimes within exchanges are NOT part of the estimates.
• If the total volume of crypto transactions is an iceberg, “Just 10 percent is above the waterline [recorded on the blockchain], the rest is recorded on internal ledgers of crypto exchanges, which have in some case been found to be sloppy or outright fraudulent”.

Leveraged Trading Maximizes “Transaction Volume”

• “In crypto, you can have extreme amounts of leverage that makes the total transaction volume really big, while illicit activity like ransomware payments don’t involve leverage”.

Want to Lose a Needle? Create a Bigger Haystack.

• Wash trading inflates crypto transaction volumes…which magically shrinks the illicit portion of “all crypto transactions”.

  

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Dynamic Securities Analytics, Inc. provides litigation consulting to help clients successfully navigate disputes involving securities, cryptocurrency, and money laundering.