Crypto criminals will spend $1bn on dark web in 2019, says Report

Ladesope Ladelokun with Agency report

Not less $1 billion will be spent in Bitcoin in illegal online marketplaces this year, according to a report by Chainalysis.

While the crypto community is excited about the possibility of wide adoption of Bitcoin, criminals have embarked on ceaseless spending of their coins on the dark web for buying drugs, child pornography, et al.

The report, according to the firm which helps companies such as cryptocurrency exchanges investigate and prevent illegal transactions show that the proportion of Bitcoin transactions dedicated to illegal purchases are declining, and about $515 million of the digital coin has already been spent this year on the dark web.

It further revealed that dark-net spending in Bitcoin peaked in 2017, at $872 million, and declined last year as the coin’s price took a dramatic dive.

The findings are a reminder of the regulatory risks surrounding the digital tokens, which are beloved by criminals looking to preserve some degree of anonymity.

Last month, the Financial Action Task Force — an inter-governmental organization focused on combating money laundering and terrorist financing — began mandating strict know-your-customer measures for crypto exchanges and custodians.

Also in June, Europol met with companies in the space to trade tips on best practices in detecting crypto-facilitated crime.

Of all the illegal online marketplaces, Hydra is the largest, according to Chainalysis, which examined transactions on the Bitcoin blockchain to see how much was being spent on these sites.

Drugs are the most prominent category of goods sold, but child porn and stolen credit-card information are also in demand, Chainalysis found.

Bitcoin is the most popular cryptocurrency accepted on these marketplaces, followed by Monero, Chainalysis said.

While the growth in illicit Bitcoin spending maybe alarming, a major caveat is that the proportion of Bitcoin transactions tied to illicit deals is declining.

Illegal activity has accounted for less than 1 Bper cent of all Bitcoin activity so far this year — down from 7 per cent in 2012, according to Hannah Curtis, senior product manager of data at Chainalysis.