Half of All Bitcoin Transactions for Sex and Drugs: Study

We all feel pretty certain that it’s happening. Some people must be using cryptocurrencies for illicit activities, right?

It might even be a smart thing to do. After all, a briefcase only holds about $200,000 worth of $20 bills and would weigh more than 20 pounds.

Now we have proof that criminals are using cryptocurrencies. A paper titled Sex, Drugs, and Bitcoin: How Much Illegal Activity Is Financed Through Cryptocurrencies? was recently published by a team of Australian researchers.

They found “that approximately one-quarter of Bitcoin users and one-half of Bitcoin transactions are associated with illegal activity. Around $72 billion of illegal activity per year involves Bitcoin, which is close to the scale of the U.S. and European markets for illegal drugs.”

Research started by downloading the entire Bitcoin blockchain. This gave the team a ledger of all Bitcoin activity.

Some Bitcoins were known to have criminal ties. These would be coins seized by the FBI or authorities in Europe and Australia.

“What the FBI did was grab all the Bitcoin that was in the escrow accounts and auctioned it off to the public. We can observe the auction of all those Bitcoins and work backwards through the blockchain to find the actual escrow accounts and see all the users who had money sitting at Silk Road,” one of the authors told news.com.au.

The ledger was combined with other data to create a database of about 6 million Bitcoin users. The data was analyzed for patterns to find how big the average transactions of users were, how frequently users completed transaction and who they traded with.

Black economy

“[We used] an econometric model that looks for users that are similar in characteristics to those that are known to be illegal, accounting for the fact that our sample is non random,” Talis Putnins of the University of Technology Sydney explained.

High volatility and rapidly rising values have made cryptocurrencies attractive to traders. But, these aren’t characteristics of money consumers will use in day-to-day transactions.

In December, Australia Reserve Bank governor Philip Lowe noted the problems with using crypto for everyday transactions didn’t apply to criminal activities.

“When thought of purely as a payment instrument, it seems more likely to be attractive to those who want to make transactions in the black or illegal economy, rather than everyday transactions,” Lowe said at a conference in Australia.

Now the central bankers of the world have data to support this theory. And law enforcement has a technique that could allow them to catch money launderers, drug dealers and other users of the dark web.

Bulletproof Your Portfolio Now!

A smart investor should be prepared for anything. That’s why David Frazier created the Bulletproof Wealth Report. This comprehensive investment service is everything you will need to survive and thrive in the looming meltdown. In other words: It’s how anyone can make their portfolio bulletproof. It’s a mix of fast-growing, leading companies that are the engine of American prosperity. To that he adds a healthy dose of “insurance policies” i.e. stocks and funds that benefit when the next recession strikes. The future favors the prepared. You can be prepared. Not only that — you can profit.
Bulletproof My Portfolio!

Cryptocurrency Will Shine Through the Coming Chaos

While the U.S. spends and spends and spends its way into oblivion, the eventual result will be inflation. Serious inflation. The dollar will crash, gold will shoot higher and Bitcoin, well, it can only become more scarce and more valuable. There’s a natural ceiling to the number of Bitcoins that will exist — ever. By design, there can only be 21 million of them. Soon, the ceiling will be hit. Now is the moment to get into cryptocurrency. There’s a been a rise of late, but prices are consolidating, setting up for the next leap higher. Grab Keene Little's widely followed cryptocurrency newsletter, Crypto Wealth Protocol completely risk free.
Yes! Send Me A Free Issue

Leave a Reply