Elliptic reports that $400 million in XRP is connected to illegal transactions

  • Ali Raza
  • 21st November 2019
Elliptic reports that $400 million in XRP is connected to illegal transactions
  • A crypto forensics firm Elliptic reported that criminals used more than $400 million in XRP for illegal transactions.
  • In most cases, illegal activities included scams, theft, and even credit card schemes.
  • Researchers believe that XRP's use in the dark markets is still minor due to its connection to banks.

The use of cryptocurrencies for illegal purposes has always been one of the main arguments of those who are still against cryptocurrencies. While the crypto space has come a long way in fighting against illegal use, there are still those who would use digital money for nefarious purposes.

According to Elliptic, a crypto forensics and analysis company, it appears that criminals used around $400 million in illegal XRP transactions. The company stated that this amount represents around 0.2% of all XRP transactions.

Elliptic started researching the project over a year ago, according to its chief scientist and co-founder, Tom Robinson. During their research, the company identified hundreds of XRP accounts that criminals use for illegal activities. Some of these activities include scams, thefts, and even the sale of stolen credit cards.

Analysts found researching XRP challenging

According to Robinson, Elliptic’s goal is to shine some light on the illicit activity within the crypto space. That way, traditional financial institutions would have a better understanding of what is going on within the crypto industry.

The company decided to investigate XRP for several reasons. XRP is the third-largest cryptocurrency, and it has a very different architecture from the likes of Bitcoin and Ethereum. Additionally, XRP has a close connection to hundreds of banks. All of this represented a significant technical challenge for the firm, which is why analysts frequented the dark web to monitor money laundering patterns.

Their research led to a better understanding of XRP, and the discovery of illicit activities. As mentioned, most of them were scams, thefts, and Ponzi-schemes. Even so, a company called CipherTrace estimated that criminals used over $4.3 billion in crypto for illicit activities, in total. According to Elliptic, there is not a lot of dark market activity when it comes to XRP itself. After all, the project exists to serve as a tool for the banks partnered with Ripple Labs. Criminals usually tend to stay away from such mechanisms, and would rather use other assets with high liquidity, such as Bitcoin.

By Ali Raza
A journalist, with experience in web journalism and marketing. Ali holds a master's degree in finance and enjoys writing about cryptocurrencies and fintech. Ali’s work has been published on a number of cryptocurrency publications. Raza is the co-founder of 5Gist.com, too, a site dedicated to educating people on 5G technology.
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