Criminals Stay Away from Ripple, But Ponzi Schemers Love it

About $400 million of the digital coin has already been spent this year on the so-called dark web.

Only 0.2 percent of all Ripple’s XRP transactions are associated with illegal activity, according to Elliptic, a cryptocurrency tracking company that works with law enforcement agencies. Based on available blockchain forensic data, their analysis found that only a tiny percentage of transactions to exchanges were from illicit sources.

Although the proportion of XRP transactions dedicated to illegal purchases is low, about $400 million of the digital coin has already been spent this year on the so-called dark web. While researchers have linked bitcoin illegal transactions with crimes such as hacks, money laundering, and the drugs, a large portion of XRP criminals are operating Ponzi schemes.

Discover iFX EXPO Asia 2020 in Macao – The Region's Leading Investment Event

“The type of activities they found were primarily scams, like Ponzi scams, thefts. A smaller category is the sale of credit card details,” said Tom Robinson, chief scientist and co-founder of Elliptic.

The good news for XRP enthusiasts is that the sheer popularity of the cryptocurrency amongst financial institutions is a major contributor to pushing criminals away since they “do not want to be associated with any mechanism related to that use.”

Suggested articles

How to Acquire New Clients Using Content MarketingGo to article >>

Although Ripple is regularly grouped with other cryptocurrencies, its purpose is different ‎as it also operates a ‎decentralized payment settlement solution for banks and financial institutions that is fast and ‎scalable.‎ Ripple was in the news recently after it announced a $30 million investment in global money transfer company MoneyGram.

As of this writing, Ripple ranks third on the list of top cryptocurrencies by market cap, behind bitcoin and Ethereum.

Elliptic’s findings from their most recent part of the research sample, suggested that around 0.5 percent of bitcoin market participants use the cryptocurrency “primarily for illegal purposes.” Still, the low figures are a reminder of the regulatory risks surrounding the crypto space, which is beloved by criminals looking to preserve some degree of anonymity.

Based in London, Elliptic has recently raised $23 million in a funding round led by Japan’s SBI Holdings to fuel expansion plans into Asia. The company sells blockchain analytics tools to cryptocurrency platforms, as well as banks and law enforcement.

Got a news tip? Let Us Know