Debunking Major Myths With Binance: Crypto Being Mainly Used by Criminals

The fact is that ever since crypto exists, there has been a load of myths shrouding the space. The truth is that many of them couldn’t be further from the truth, and it’s important to provide some clarity to the matter, especially now that global regulators have their sights locked on the industry.

The main takeaways from this article are:

• The concept that crypto is used by criminals can be traced back to the early media coverage of the space. More specifically, it’s centered around the infamous Silk Road marketplace.
• Information from the independent company providing blockchain data and analysis, Chainalysis, shows that illicit activity accounted for approximately 0.15% of all crypto transactions in 2021.
• Data from the UN, on the other hand, shows that between $800 billion and $2 trillion is laundered every year. Crypto accounts for only about 0.03% of that.

It goes without saying that blockchain technology, being relatively new, is a subject of many misconceptions, so let’s have a look at one of the most common myths and attempt to see if there’s any merit to them.

Myth: Crypto is Only Being Used by Criminals

Cryptocurrency being used for illegal activities has been a very heavily-debated topic of concern since the very early days of the industry. The public perception of crypto as being inherently linked to illicit activity can be traced back to the times when the infamous Silk Road was operating in full force.

To those unaware, Silk Road was an online black market that was operating through the dark web from 2011 to 2013. It was well-known for enabling people to buy and sell illegal goods. It was involved in drug trafficking and others of this kind, and its association with crypto contributed to the negative reputation of the industry in the face of mainstream media.

In addition, the perceived decentralization and anonymity of cryptocurrencies have added fuel to the fire of concerns that they facilitate criminal activity.

And while it’s true that there are criminals that use crypto, the extent of it is absolutely minuscule compared to the overall transaction volume and even more inconsiderable when compared to how many criminals prefer fiat.

Reality: Data Shows the Crypto is Used Primarily by Ordinary People

Data from an independent blockchain analysis company called Chainalysis shows that crypto is mainly used by ordinary people, and it exists as a legitimate tool for a range of everyday transactions.

The leading cryptocurrency exchange, Binance, alone has more than 120 million registered users. Of course, as with any emerging technology, criminals and bad actors will always try to use it for nefarious purposes. However, illicit activity comprised only about 0.15% of all crypto transactions in 2021. This number is down from 0.62% in 2020, despite the exponential growth of the industry. Money laundering accounted for 0.05% of that.

It’s also worth noting that Chainalysis provides data to government agencies, including the US Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigation, as well as the Drug Enforcement Agency. It also provides data to the UK’s National Crime Agency.

Now, let’s compare that to the world of fiat. Data provided by the United Nations revealed that criminals launder between $800 billion and $2 trillion every year. This is between 2% and 5% of the global GDP. Crypto represents a mere 0.03% of that.

It’s clear that criminals don’t like crypto because all transactions are publicly and permanently recorded. This enables the work of investigators – it helps them trace the money trail and easily identify bad actors.

Conclusion

The myth that crypto is being used primarily by bad actors is grossly overstated. The fact of the matter is that the vast majority of transactions and investments are entirely legitimate and focused on the real-world use case of the technology.

The appearance of blockchain technology has opened up new opportunities, and cryptocurrencies are just one of the aspects.

From non-fungible tokens (NFTs) to decentralized finance (DeFi), the potential applications of the technology are varied and numerous.