While cryptocurrencies are often criticized in discussions of illicit finance, criminals still prefer cash! 💸 A new report from Homeland Security Investigations (HSI) and Crypto ISAC highlights how regulated crypto platforms provide valuable support in combating crime and enhancing national security through transparency.

According to the report, the rate of illicit activity in crypto transactions is quite low. For example, only 0.61% of USDT transactions are flagged as potentially illicit. Similarly, for USDC, this rate is 0.22%, and according to Chainalysis, only 0.34% of total on-chain transactions in 2023 will involve illicit activity.

Traditional finance and crypto systems are facing increased regulatory scrutiny to combat illicit finance. However, while cryptocurrencies provide transparency, transactions can be tracked, while traditional finance lacks this technology. This makes it difficult for law enforcement to obtain and track financial records.

Cash is still the number one choice for criminals because it is untraceable. The DEA’s 2024 report confirms that cash is preferred in drug trafficking due to its anonymity and lack of traceability.

Blockchain’s traceability is a huge advantage for law enforcement and regulatory agencies. Know Your Transaction (KYT) tools allow criminals to be tracked by tracking transactions in real time. This allows crypto companies and agencies to continuously assess risk and offers a more secure platform than traditional systems.