Unpacking Crypto Crime Trends: An Analysis of Crypto Claims

As a leader in the blockchain analytics and anti-money laundering (AML) sector, Coinfirm not only provides solutions for businesses to stay compliant and secure but also helps victims of cryptocurrency fraud through our project, ReclaimCrypto.com. Here, we offer victims a platform to report crypto crimes and assist them in the possible recovery of their stolen assets. In this article, we delve deep into the data from ReclaimCrypto.com to identify the shifting trends in cryptocurrency-related crime over the past five years.

The data, reflecting the percentage of claims associated with different cryptocurrencies from 2019 to 2023, provides a comprehensive view of the changing landscape of crypto crimes. This analysis identifies notable trends and anomalies that offer a clearer understanding of how the crypto-crime scenario has evolved over the years.

Declining Bitcoin Claims:

Bitcoin (BTC), the largest and most well-known cryptocurrency, unsurprisingly, featured heavily in the claims in the earlier years. In 2019, Bitcoin accounted for 39% of all claims, which surged to a peak of 66% in 2020. However, the percentage of Bitcoin-related claims has shown a consistent decline since then, falling to 35% in 2021, then to 21% in 2022, and finally to 28% in 2023. This trend could be attributed to increased awareness and security enhancements around Bitcoin transactions, but also to the growing diversity in the crypto market.

Varying Ethereum Claims:

Ethereum (ETH) claims have varied over the years, starting at 8% in 2019, peaking at 22% in 2021, and dropping to 14% in 2023. The popularity of Ethereum for smart contracts and the rise of DeFi (Decentralized Finance) projects built on its platform could account for the peak in 2021.

Emergence of Binance Coin (BNB) Claims:

Interestingly, Binance Coin (BNB) claims made their first appearance in 2021, accounting for 5% of claims, and maintaining that proportion in 2022. As Binance Smart Chain’s native token, BNB’s growing involvement in fraudulent activities could be tied to the rapid expansion of the Binance Smart Chain ecosystem and its increasing adoption.

Resurgence of Ripple (XRP) Claims:

Ripple (XRP) claims have remained relatively low, accounting for 5% in 2019, falling to 4% in 2020, and then further reducing to a negligible presence in 2021 and 2022. However, 2023 witnessed a resurgence of XRP claims, rising back to 4%.

Rising Tether (USDT) Claims:

Most notably, the percentage of Tether (USDT) claims, a stablecoin pegged to the US Dollar, saw a significant increase over the years. Starting from a mere 3% in 2020, the USDT-related claims rose to 7% in 2021, then significantly jumped to 19% in 2022, and finally reached a peak of 32% in 2023.

The surge in USDT-related claims is noteworthy, as it marks the increasing involvement of stablecoins in crypto crimes. Tether (USDT), being a stablecoin, is designed to maintain a stable value against a specific asset or a pool of assets, most commonly USD. The appeal of stablecoins lies in their ability to provide stability in a highly volatile crypto market. They allow users to escape volatility without exiting the cryptocurrency space entirely, and hence have seen widespread adoption for transactions, trading, andvalue storage.

The increased use of USDT in fraudulent activities could be attributed to several reasons. First, the widespread adoption of USDT might have attracted criminals due to its high liquidity and ubiquity across exchanges, making it easier for them to move funds while avoiding detection.

Second, the relative stability of USDT may provide an additional layer of security for fraudsters. Unlike other cryptocurrencies, whose value might drastically fluctuate, the value of stolen USDT is relatively stable, reducing the risk for criminals holding these assets.

Third, the perception that stablecoins, being pegged to real-world assets, are somehow ‘safer’ or ‘less traceable’ might be playing into this trend. It’s important to debunk such misconceptions and continue to improve the tracking of stablecoin transactions in the fight against crypto crimes.

Finally, the rise in DeFi and yield farming platforms, many of which use USDT as a base currency, might have also indirectly contributed to the increase in USDT-related claims. As more users engage with these platforms, the opportunities for fraud also increase, leading to a higher number of reported incidents.

It’s worth noting that while we have seen an increase in USDT-related claims, it does not necessarily imply that the USDT network itself is less secure. Rather, it’s a reflection of its widespread usage and certain characteristics that might be exploited by bad actors. Despite these challenges, we are confident that with continuous improvements in tracking technologies and regulatory practices, we can tackle this issue effectively.

As we continue to navigate the ever-evolving crypto landscape, it’s crucial to stay vigilant and informed. At Coinfirm, we are committed to aiding in the fight against crypto fraud and providing support for victims of these crimes. Through continuous innovation, advanced tracking technologies, and regulatory partnerships, we strive to make the crypto world a safer place for all.

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