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TacticalCoder

> where over a billion euros have been laundered or defrauded

GDP size: $105 trillion

Percentage of the world GDP linked to criminal activities: 3% to 5% of the GDP (CIA official factbook).

We're talking $3 to $5 TRILLION linked to criminal activities.

Cryptocurrencies do not even register.

Highly convenient scapegoat though.

Crime, money laundering, fraud, ponzi, etc. all existed long before Satoshi created Bitcoin.

Back to the $3 to $5 trillion linked to crime: KYC/AML brings back about $12 billion per year.

A rounding error.

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It doesn't matter what percentage of all fraud is crypto - it matters what percentage of crypto is fraud.

> Overall, the share of all cryptocurrency activity associated with illicit activity has risen for the first time since 2019, from 0.12% in 2021 to 0.24% in 2022. [2]

https://go.chainalysis.com/2023-crypto-crime-report-demo.htm...

Another estimate from a known crypto skeptic puts an upper bound at 3% illegal activity.[1]

> For example, illegal transactions, scams and gambling together make up less than 3% of volume.

Either way this 0.12%-3% range doesn't begin to approach the ~6%-12% estimated illegal volume for USD.[2]

[1]: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3942181

[2]: https://www.investopedia.com/articles/markets/032916/how-big...

Definitely depends on what you classify as illegal and how you count it. For example, if I count FTX ($9bn), UST ($18bn), and LUNA ($40bn) I'm already at 5% of the crypto market cap.

This is not what money laundering means. The origin of money that was deposited to FTX and Luna was not criminal original. There was nothing to launder here, as the source of funds was clean and proper.

Criminals prefer cash and real estate, so it is not a surprise.

What are the other crypto activities? I dont see that many places where you can pay with crypto, so what are those other activities, or is that just trading?

Stablecoins (payments or store of value) are likely the largest non-trading activity today with $123B market cap and $30B in daily volume. You'll see a lot of volume around staking crypto / running validators. Tokenized treasury bonds and other real-world-assets like carbon credits are getting up there, so is credit investing with companies like Maple / Credix / Centrifuge.

The long tail of activities includes things like DAOs (remember Constitution DAO?), prediction markets, internet infrastructure (VPNs, Arweave, ENS), synthetic assets, and more.

Since this is in the context of tracing illicit funding, two items to throw in the pile for consideration:

1. Trading which is actually part of the laundering/tumbling process, to disguise the path of coins from initial shady transactions.

2. "Wash trading" (yet another cleaning-related term) where a self-trade is disguised as a real one in order to manipulate the market.

Bingo

The best use case is store of wealth and transfer of value in countries where institutions are corrupted.

Here is what an Argentinian has to say on HackerNews

https://news.ycombinator.com/item?id=35956148

Speculation

But wouldn't a speculator buy and hold (i.e. not be active)?

Indeed. Never mind the fact that all transactions take place on an immutable public ledger that’s available forever…

“See, right here is the public record of how you were fooled into buying a worthless NFT. Then right here is where you converted USD into Crypto Bux so you could earn an impossible 25% interest rate… for a month… until Bux went to zero… right here. See? Can’t be a scam! It’s all public!”

Never thought about it that way. Just wondering what is the percentage of crypto used for criminal activities? I guess it won't be easy to thing to measure?

Related to this it is estimated ~1% - 2% of money on your bank account is criminal origin (depends on the bank, on the country).

Most of criminals prefer real estate and cash over cryptocurrencies. London and Dubai are the best.

Here is a documentary on Londongrad

https://youtu.be/GAOJCcwxDug?si=M0Lnso1rjmdckoDH

You can even find a map that shows different parts of London where East European and related criminals have set up their homes

https://twitter.com/moo9000/status/1471369253966290948

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