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This article was published on November 20, 2019


Analysis of $400M in illicit XRP activity shows it’s mostly theft and Ponzi schemes

Cyberbaddies won't use Ripple (XRP) 'cos its too centralized

Analysis of $400M in illicit XRP activity shows it’s mostly theft and Ponzi schemes
David Canellis
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David Canellis

David is a tech journalist who loves old-school adventure games, techno and the Beastie Boys. He's currently on the finance beat. David is a tech journalist who loves old-school adventure games, techno and the Beastie Boys. He's currently on the finance beat.

Cryptocurrency analysts have identified $400 million worth of illicit Ripple (XRP) transactions  mainly Ponzi schemes and exchange thefts.

The illicit XRP activity detected by London-based firm Elliptic amount to less than 0.2 percent of all XRP payments processed to date, which is less than other cryptocurrencies like Bitcoin.

In press materials shared with Hard Fork, Elliptic chief scientist Tom Robinson attributed this to two main factors: XRP is simply not as liquid as Bitcoin or Ethereum, so it’s not as easy to “cash-out” large amounts of illicit cryptocurrency.

“XRP is [also] more centralized than other crypto-assets, and perhaps more associated with traditional finance – this might make it less attractive to illicit actors, who might prefer something more decentralized and ‘neutral’,” said Robinson.

That said, Elliptic did find a small amount of XRP transactions related to the illegal sale of credit card details. The firm also confirmed that unlike Bitcoin, XRP has not been adopted very much by users of underground, dark web markets.

In September, the firm recorded $829 million worth of illicit Bitcoin activity, just 0.5 percent of all transactions in its history.

“Yes, it is possible to pursue and prosecute these bad actors by tracing their crypto-asset transactions,” said Robinson. “For example, in many cases the criminals will attempt to cash-out through exchanges.”

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