Crime Rate of Cryptoassets Continues to Grow
According to a report by the crypto research firm Chainalysis, it estimates that the amount of cryptocurrency that can be tied to illicit activity or scams in 2024 could ultimately end up topping $51 billion, up from an approximately $46.1 billion in 2023. Along with the rise in sheer volume and value of these cryptocurrencies being tied to illicit activity, the report also found that so-called “stablecoins” have replaced Bitcoin as the favored type of cryptocurrency by criminals, being tied to 63% of all illicit activities. A stablecoin is a type of cryptocurrency that is designed to maintain a stable value over time, typically by being pegged to a reserve asset like the US dollar or other commodities. “Through 2021, Bitcoin was unequivocally the cryptocurrency of choice among cybercriminals, likely due to its high liquidity. Since then, however, we have observed a steady diversification away from Bitcoin, with stablecoins now occupying the majority of all illicit transaction volume,” it noted in its report. It elaborated that, “Individuals operating in sanctioned jurisdictions, often have a greater incentive to use stablecoins due to challenges otherwise accessing the U.S. dollar through traditional means amid a desire to benefit from its stability.” And many of the more recent scams also use AI tools in their attempt to carry out their crimes, with the use becoming more prevalent among, “[a]n array of illicit actors, including transnational organized crime groups, are increasingly leveraging cryptocurrency for traditional crime types, such as drug trafficking, gambling, intellectual property theft, money laundering, human and wildlife trafficking, and violent crime.” Such a rise in criminal matters is hardly surprising given the popularity of cryptocurrencies amongst various segments of the population and something that should be monitored as it becomes more ubiquitous in our world.
Illinois Proposes Stricter Rules to Regulate Crypto Industry
The Illinois Senate Executive Committee recently passed Senate Bill 1797, also known as the Digital Assets and Consumer Protection Act, with its aim being to, “crackdown on more than $163 million lost to cryptocurrency fraud in Illinois in 2023” according to its sponsor, State Senator Mark Walker. It will now receive a full vote in the Senate and, if passed, it would place the existing regulatory agency, the Illinois Department of Financial and Professional Regulation (IDFPR), in charge of oversight and regulating the industry in Illinois. By doing so it would give the agency, “significant oversight and enforcement powers, including the ability to investigate, levy fines, and take action against non-compliant businesses” in the industry. The overall aim of the bill is to reduce fraud and protect consumer assets/investors, as well as requiring crypto currencies to register with the agency. Still, the bill allows for a timeframe for those businesses to become compliant with any regulations, with a current implementation phase requiring they be compliant by January 2027. This bill and its attention to the cryptocurrency industry it brings makes it clear that further regulation is likely.
