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Yellen said: > "Many [cryptocurrencies] are used, at least in a transactions sense, mainly for illicit financing." Chainalysis, a firm that does compliance an

Yellen said: > "Many [cryptocurrencies] are used, at least in a transactions sense, mainly for illicit financing." Chainalysis, a firm that does compliance and criminal research professionally for governments, says that the total funds received by criminal entities is only 0.34% of all activity in crypto.[1] Hopefully the department does its due diligence and realizes that rhetoric is diverging from reality. [1]: https://blog.chainalysis.com/reports/2021-crypto-crime-report-intro-ransomware-scams-darknet-markets https://blog.chainalysis.com/reports/2021-crypto-crime-repor...

jcranmer 6y ago
I'm somewhat skeptical of the analysis when it revised the share of criminal activity in 2019 from 1.1% to 2.1%--in other words, more than doubling that value. That revision is on the basis of "the identification of more addresses associated with criminal activity that were active in 2019." Your citation that it's "only 0.34%" is a somewhat dishonest distillation, because the report itself advises that the number is only for known criminal activity, and that the number is expected to rise over time as well. What I would instead like to see, and that this report does not illuminate at all, is a breakdown of how all transactions looks. How many transactions are related to cryptocurrency-specific transactions, such as mixing coins or moving between hot wallets and cold wallets? How many transactions are related to speculation (e.g., trading one cryptocurrency for another)? How many transactions are associated with known entities, e.g. the Bitcoin address of an online (non-darknet) marketplace? How many transactions are unclassified?
- lazzlazzlazz 6y ago
  Even if 90% of illicit financing transactions are being missed by Chainalysis, the original claim is that "many are used [...] mainly for illicit financing" is outright false.
MarkMc 6y ago
By 'transactions sense' I think Yellen means using cryptocurrency to buy and sell goods and services. The Chainalysis figure seems to include people simply swapping USD for Bitcoin. So in that sense Yellen may be correct
anm89 6y ago
I sincerely doubt she cares what the data says in this case. She's building a narrative.
fat_pikachu 6y ago
She's using it as a pretext for when they eventually ban or regulate crypto to death, not to genuinely inform anyone.

jcranmer 6y ago

I'm somewhat skeptical of the analysis when it revised the share of criminal activity in 2019 from 1.1% to 2.1%--in other words, more than doubling that value. That revision is on the basis of "the identification of more addresses associated with criminal activity that were active in 2019." Your citation that it's "only 0.34%" is a somewhat dishonest distillation, because the report itself advises that the number is only for known criminal activity, and that the number is expected to rise over time as well. What I would instead like to see, and that this report does not illuminate at all, is a breakdown of how all transactions looks. How many transactions are related to cryptocurrency-specific transactions, such as mixing coins or moving between hot wallets and cold wallets? How many transactions are related to speculation (e.g., trading one cryptocurrency for another)? How many transactions are associated with known entities, e.g. the Bitcoin address of an online (non-darknet) marketplace? How many transactions are unclassified?

lazzlazzlazz 6y ago
Even if 90% of illicit financing transactions are being missed by Chainalysis, the original claim is that "many are used [...] mainly for illicit financing" is outright false.

MarkMc 6y ago

By 'transactions sense' I think Yellen means using cryptocurrency to buy and sell goods and services. The Chainalysis figure seems to include people simply swapping USD for Bitcoin. So in that sense Yellen may be correct

anm89 6y ago

I sincerely doubt she cares what the data says in this case. She's building a narrative.

fat_pikachu 6y ago

She's using it as a pretext for when they eventually ban or regulate crypto to death, not to genuinely inform anyone.