Chainalysis top manager Jim Lee: "Cryptocurrencies account for only a small portion of illicit transactions"

However, according to Lee, this is fundamentally wrong. He explained that unlike cash, blockchain provides transparency in cryptocurrency transactions, so it is more difficult for criminals to launder illegally obtained funds. Many blockchains are open, and law enforcement can trace the source of the cryptocurrencies received.

Lee explained that most transactions are pseudo-anonymous. They are recorded on the blockchain and are publicly available, and with additional data and in-depth analysis, criminals can be reached through these transactions.

Despite the benefits of blockchain, Lee recognized that criminals continue to abuse the innovation to steal cryptoassets. Fraudsters often use cryptocurrency mixers to hide transactions. However, Vitalik Buterin, co-founder of Efirium, is convinced that cryptomixers are just a privacy enhancing tool.

Lee also emphasized that Initial Coin Offering (ICO) fraud has become the most common threat in the crypto space, as everyone is looking to get rich quick in the growing market. The increasing cases of ICO fraud undermine trust in cryptocurrencies, Lee noted.

He concluded by saying that Chainalysis tools enable transparent tracking of suspicious cryptocurrency transactions, helping law enforcement agencies in catching criminals.

Recall that in 2022, Chainalysis introduced the Storyline tool for tracking transactions in DeFi protocols. In the same year, the company released tools for tracking cryptocurrency wallets under sanctions.