Let’s be honest—when you mention crypto at a family dinner, there’s always someone who says:

“Isn’t that just for criminals?”

The stereotype is everywhere: Bitcoin = money laundering. Ethereum = scams. NFTs = shady rug pulls. And to be fair, scams do exist (and we already covered them in “Spot the Scam”). But the idea that most crypto is used for crime? That’s just not true.

Think of It Like This: Cash vs Crypto 💵

Imagine two people:

  • One uses cash to buy something illegal.
  • Another uses crypto.

Which one leaves a bigger trail? Surprisingly, it’s the crypto user. Why? Because every transaction is permanently recorded on the blockchain. You can’t erase it. Cash is anonymous. Crypto is pseudonymous—your name isn’t attached, but your wallet address is. Once someone links your identity to that address, your entire history is visible.

So if criminals wanted to hide forever, cash is actually better.

The Solution: What the Data Actually Says

  1. Illegal use is shrinking. Chainalysis reported that in 2023, only 0.34% of crypto transactions were linked to illicit activity. That’s less than $24 billion in a $7+ trillion global volume. By contrast, the UN estimates 2–5% of global GDP (trillions) is laundered through traditional finance.
  2. Law enforcement loves blockchain. Agencies like the FBI and Interpol use blockchain analytics tools (like Chainalysis) to track stolen or laundered crypto. Big arrests—like the 2021 Colonial Pipeline ransomware case—were solved because investigators traced Bitcoin transactions.
  3. Transparency > secrecy. Unlike offshore bank accounts or cash in suitcases, crypto is open to anyone with an internet connection. That makes it ironically easier to catch criminals than in traditional systems.

Real Examples That Actually Matter

  • Colonial Pipeline Hack (2021): Hackers demanded Bitcoin ransom. The FBI recovered much of it by tracing the blockchain.
  • Silk Road (2013): The infamous dark web marketplace was shut down largely because every Bitcoin transaction was traceable.
  • Regular Banks: Major global banks (HSBC, Danske Bank) have been fined billions for enabling actual money laundering through fiat systems.

What You Can Do Today

  • Don’t panic at headlines. When you see “Crypto used in crime,” check the actual percentage compared to total volume.
  • Learn to trace. Explore tools like blockchain explorers (Etherscan, Blockchain.com) to see how transparent transactions really are.
  • Talk back to the myth. Next time someone says “crypto = crime,” drop the stat: less than 1% of crypto is illicit, versus 2–5% of global fiat money.

Reality Check

  • Yes, scams and hacks exist in crypto (rug pulls, phishing).
  • But the idea that crypto is mostly crime is outdated and misleading.
  • In fact, crypto may be the worst tool for long-term crime—because your transactions are carved into digital stone, forever.

TL;DR

  • Crypto ≠ Crime. In 2023, only 0.34% of crypto activity was illicit.
  • Fiat systems launder way more. 2–5% of global GDP in crime money flows through banks.
  • Blockchains are traceable. Criminals leave digital footprints that are easier to follow than cash.

Next Step: Curious about other risks that aren’t scams? Read our article “Risks Beyond Scams: Volatility, Bugs, and Rug PullsRisks Beyond Scams: Volatility, Bugs, and Rug Pulls” to understand what could really shake your crypto journey.

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