CipherTrace Report – Illegal Action in the Crypto Ecosystem
Against extreme market conditions, CipherTrace’s June report details the positive developments in the crypto ecosystem, which indicates a reduction in crypto-related crimes. The report showed that cryptocurrency volume increased from $4.3 trillion by 2020; Up to $16 trillion by 2021. The firm argues that this exponential growth is why regulators seek a crypto ecosystem.
According to CipherTrace, illegal activity has declined and now represents a small part of the entire crypto ecosystem. The firm estimates that illegal activity accounted for 0.62% and 0.65% of total cryptocurrency activity in 2020; it Decreased to 0.10 last year. CipherTrace estimates hackers have raised $2.4 billion by analyzing the top ten DeFi hackers in 2021 and Q1 2022.
It is worth noting that the March 2022 operation of the Ronin Network; Also, the 2021 Poly Network hack account for almost half of the total. While this amount is significant, the firm describes in detail that the rapidly growing ecosystem makes it a small part of the total market value.
Crypto and Regulations
The cryptocurrency market grew by 1.456% from 2019 to the end of March 2022. The market peaked at $3 trillion in November 2021; several cryptocurrencies have risen since then. The company also said most illegal activities have shifted to DeFi, NFT, and next-generation mixer services. It is also noted that the numbers used in the Om report do not reflect the actual value of the illegal actions. As a warning, the fact remains that not all illegal activities are known, Be it in traditional financial channels, cryptocurrencies, or other informal value transfers.
Regulators have long expressed concern about people using the crypto market as a haven for illegal activities. The significant growth thus developed has led to the strengthening of regulatory measures by governments to keep pace. The report cites President Biden’s cryptocurrency order; In the study of blockchain technology in March, Dubai has enacted virtual asset regulatory and anti-money laundering laws proposed by the European Union as examples of such regulatory efforts. It is worth noting that most of the regulatory efforts will limit the threats to the crypto ecosystem. This means that cryptocurrency organizations have come under increasing regulatory control.
Crypto Hedge Fund’s Tweet Boosts Speculation About Losses
A vague tweet from the founder of Three Arrows Capital, which liquidated a crypto holding company due to falling prices, raises new fears in an already shaky industry. Although the information on fund size and trading strategies is scarce, Nansen estimated in early March that Three Arrows had managed to raise about $10 billion. It owned more than 5% of Grayscale Bitcoin Trust as of December 2020; According to the latest available regulatory documentation, It is unclear whether he kept the three arrows in that position. The market value of the trust is about $10 billion.
Since the beginning of May, crypto markets have been followed by two high-profile explosions; This spoiled the asset class, which was already under the pressure of a tighter monetary policy. Terra’s decentralized financial ecosystem collapsed; When the algorithmically stable coin, which was its central part, disintegrated from its dollar pedestal. About a month later, crypto lender Celsius froze the funds on the platform, where it offered high incomes, citing the need for “liquidity stabilization”.
The last focus was on cryptocurrency-staked Ether. Nansen said the foundation began withdrawing stETH from decentralized platforms last month. As of Tuesday, more than 80,000 had been removed from the stETH Decentralized Lending Project Aave in four transactions; It then replaced 38,900 stETH with 36,700 ethers. The stETH token will likely be redeemable for a single ether coin; Scheduled upgrade of Ethereum network after launch. Market observers say a change in the stETH broadcast from a ratio of 1 to 1 could be an indication of an urgent liquidity need.
Conclusion
It is worth noting that the price of stETH fell 41% in the last seven days to $1,055.14; meanwhile, Ether fell to $1,116.17, for a total of 39%. Three Arrows were among the investors selling Luna cryptocurrency for $1 billion in February. Luna lost almost all of her value in May When the TerraUSD dollar attachment was broken. A coin dealt with Luna owners to compensate for their losses fell 87% compared to May 28. It is worth noting that the total market value of cryptocurrencies controlled by CoinGecko started at $3 trillion in November; Fell to $944 billion.
