New data shows that illegal bitcoin purchases are expected to hit more than $1 billion this year, which will be a new record. According to a report by Chainalysis, around $515 million of bitcoin has already been spent this year on the dark web.
The findings also revealed that Hydra is the largest of the illegal online marketplaces, and drugs are the most popular category of illegal goods sold, with child porn and stolen credit-card information also in high demand. As for how users are paying for these illegal goods, bitcoin is the most popular crypto accepted, followed by Monero.
However, while illegal bitcoin spending remains high, the proportion of bitcoin transactions connected to illicit deals is declining, according to the report. In fact, illegal activity has made up less than 1 percent of all bitcoin activity so far this year — a decrease from 7 percent in 2012, said Hannah Curtis, senior product manager of data at Chainalysis, according to Bloomberg.
Still, the findings will be of concern to lawmakers trying to tighten rules on crypto purchases. Last month, the Financial Action Task Force (FATF) — a global regulatory firm based in Paris, comprised of countries ranging from China to the U.S. — said it was going to boost its scrutiny over digital currencies to make sure they weren’t being used for money laundering.
The firm announced that it will draft rules and oversight for cryptocurrency firms to prevent abuse. The FATF said crypto firms and exchanges must be registered and supervised, and that suspicious transactions will have to be reported. In addition, checks on customers will need to be done as well.
“We also have some investigation on the dark web in which the payments are made in cryptocurrencies, sometimes in bitcoin, and they are switching it to more anonymized cryptocurrencies,” said Simon Riondet, the head of financial intelligence at Europol.