Better Regulation Could Curb Crypto Scams, Chainalysis Report Says

Chainalysis’ 2019 crime report found illicit activities accounted for roughly 1 percent of overall crypto transactions last year, and better enforcement of anti-money laundering and know-your-customer regulations could stamp out a large portion of that.

AccessTimeIconJan 29, 2020 at 9:15 p.m. UTC
Updated Sep 13, 2021 at 12:13 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Greater regulations and enforcement can deter some crypto crimes, blockchain forensics provider Chainalysis said in a new report.

The firm's 2020 "State of Crypto Crime" report, published Wednesday, offers analysis of illicit activities last year, contrasting 2019's actions with previous years. Chainalysis found that while the amount of bitcoin sent from criminal entities doubled between 2018 and the end of 2019, it still accounts for just 0.08 percent of the total number of bitcoin transactions last year. 

And while exchange hacks and thefts dominated headlines last year, “scams were by far the highest-earning category of crypto crime in 2019,” the report said. “Cryptocurrency scams represent a significant danger to consumer protection, and the growth of this activity in 2019 calls for increased action from regulators, law enforcement and exchanges alike.”

According to the report, scammers received roughly $4.3 billion in crypto, out of about $6 billion received from illicit activity last year. Overall, scams accounted for $8.6 billion in crypto transactions, while criminal activity (including hacks and thefts) totaled just under $12.5 billion.. 

Other categories included terrorism financing, ransomware, darknet markets, outright theft, sanctions and child abuse. Moreover, the total amount of crypto used in scams is disproportionately weighed down by “just three separate large-scale Ponzi schemes”; without them, the numbers drop dramatically (for example, the PlusToken Ponzi appears to have accounted for between $2 and $3 million alone).

Chainalysis mentions at multiple points that a solution, or at least the beginnings of one, to the issue of illicit activity can come from more informed regulation, better enforcement of regulation and action by crypto exchanges to tackle illicit activities. 

“We believe the consumer protection implications make cryptocurrency scams an issue regulators must address and law enforcement must have the resources to investigate,” the report said. “Exchanges are also in a unique position to help, both in terms of protecting users from being scammed and preventing successful scammers from depositing funds or cashing out.”

Regulators and law enforcement agents must become more familiar with analyzing blockchains as part of this effort, the report said.

The company also highlights its own services, noting that while money laundering in the fiat world might require court-issued subpoenas to tackle, “blockchain analysis tools like Chainalysis” can help investigators analyze transactions recorded on public ledgers.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is an award-winning media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In November 2023, CoinDesk was acquired by Bullish group, owner of Bullish, a regulated, institutional digital assets exchange. Bullish group is majority owned by; both groups have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary, and an editorial committee, chaired by a former editor-in-chief of The Wall Street Journal, is being formed to support journalistic integrity.

Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.