Criminals have used XRP to carry out their illicit activities, though hardly to the same degree as bitcoin, according to a new report from blockchain sleuthing firm Elliptic.

Some $400 million worth of XRP can be traced back to a variety of Ponzi schemes and darknet activities, Elliptic said in a report released Wednesday. While that may sound like a lot, it represents just 0.2 percent of XRP transactions. By comparison, $829 million of bitcoin, or 0.5 percent of that network’s transactions, have been spent on the dark web, the analytics vendor said.

“Regardless of the amount, it just demonstrates that there is illicit activity going on in this coin,” said Tom Robinson, chief scientist and co-founder of Elliptic. “Therefore, if you are a business handling some of these transactions then you need to be checking for it because you don't want to be the organization that's being used to launder those proceeds.”

Such concerns are especially acute for XRP’s target market, regulated financial institutions. Ripple, the distributed ledger technology (DLT) startup that owns an estimated 60 percent of the XRP supply and periodically sells the tokens to fund operations, has been pitching banks software that utilizes XRP for the last few years.

A Ripple spokesperson said: “Like other cryptocurrencies, XRP is open source and decentralized – it’s available to anyone to use. Ripple enabled XRP transactions are secure and through regulated institutions.”

Blockchain forensic firms like Elliptic tackle crypto involvement in things like drugs, weapons, child sexual abuse material and ransomware-as-a-service. In the case of XRP, much of the transactions related to scams and Ponzi schemes, said Robinson. 

For instance, a large chunk was accounted for by the Plus Token “investment” scheme. Earlier this year, Chinese authorities arrested six Chinese nationals on the Pacific island of Vanuatu suspected of orchestrating the scam, which collected billions in crypto from people in China and South Korea.

There has been an increase in the use of crypto to purchase things like stolen credit card numbers on the dark web and Elliptic had detected a number of those sites accepting XRP alongside other cryptos. 

But Robinson said the relatively small amount of illicit use of XRP might be down its association with traditional finance, compared to other cryptocurrencies. 

“The fact that the Ripple network itself has been targeted at large traditional banks maybe doesn't resonate with criminals trying to use it,” he said.

Ripple set out to provide a cheap and efficient cryptocurrency bridge to connect correspondent banks and so provide near-instant cross-border payments. Back in 2015, it was among the first crypto companies to receive a fine from the Financial Crimes Enforcement Network (FinCEN) for AML failings. But this was viewed as a positive among a fledgling crypto industry because it meant Ripple was closer to being regulated than other crypto firms at that time.

The same could be said for XRP in the context of having its tires kicked by Elliptic, said Robinson, since highlighting illicit XRP activity will only improve the network’s credibility. 

“Wherever you have any kind of value transfer mechanism there is going to be potentially some illicit use,” said Robinson. “I think having clarity of that and being able to know where it’s happening should give banks comfort rather than a cause for concern.”

To be clear, Elliptic was dealing with XRP, the crypto asset only. “We haven’t had any interaction with the Ripple company,” said Robinson. 

Another large investor in XRP is Japan’s SBI Holdings (previously known as Softbank Investment), which also led a $23 million investment round in Elliptic earlier this year. 

Tomoyuki Nii, executive officer for overseas investment at SBI Investment, said in an interview at the time that the bank was attracted to Elliptic because it was the best blockchain sleuthing firm when it comes to XRP.