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Comment by miohtama | Hacker News Reader

> 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...

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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...

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

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.

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?

Speculation

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

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

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!”

Reply on news.ycombinator.com