Report: $400 Million of Ripple Transactions Linked to Illicit Activities

Elliptic, a London-based provider of crypto-asset risk management solutions, recently published a report about the number of illicit transactions involving Ripple (XRP). It shows that $400 million, or 0.2% of all their transactions, are subject to illicit activities, mainly for scams and thefts.

Ripple Used for Illicit Activities

According to the report published today, November 20th, $400 million of all processed transactions using Ripple’s XRP cryptocurrency have links to illegal activities. This represents 0.2% of the entire transaction volume of XRP. The co-founder and Chief Scientist of Elliptic, Dr. Tom Robinson, noted that most of those activities are associated with scams and thefts, and fewer involve selling and sharing credit card details:

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“We have a team in London that scouts the dark web for any use of cryptocurrency. They began doing this for XRP, as well. The type of activities they found were primarily scams, like Ponzi scams, thefts. A smaller category is the sale of credit card details.”

The company behind the report, Elliptic, recently became the first XRP transaction monitoring system, and these numbers come as a result of its data analysis.

Are Cryptocurrencies the Main Means of Funding Illegal Activities?

When it comes down to illicit financial activities, cryptocurrencies are oftentimes brought to light because of their anonymous nature. Some regulators consider that it’s the lack of regulations that are the main cause for this and are hence trying to implement more restrictions.

For example, The director of the Financial Crimes Enforcement Network (FinCEN), Kenneth Blanco, recently said that the U.S. is planning to introduce strict enforcements on several businesses involving cryptocurrencies.

“It [travel rule] applies to convertible virtual currencies, and we expect that you will comply period. That’s what our expectation is. You will comply. I don’t know what the shock is. This is nothing new.”

However, hard data seems to show that, in reality, only a very small percentage of cryptocurrency transactions are actually associated with illegal activities. A recent report showed that only 0.5% of all Bitcoin transactions are purported to be linked to illicit activity.

It is also worth noting that the nature of blockchain-based technology is to provide a public record of each transaction, as well as making the exposure to the risk of financial crime a lot more manageable.

In comparison, there is generally no such transparency when cash is being used for any transactions, illicit or otherwise. When it comes to funding illicit activities, the report notes, cash is still the king.


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