Elliptic Finds Only $400 Million in XRP Transactions Are Illicit
- Illicit activity includes a variety of Ponzi schemes and darknet activities, but only represents 0.2% of all transactions.
- Elliptic started analyzing XRP transactions over a year ago and identified several hundred accounts with illegal activity.
Illustration from Freepik
Cryptocurrency analysis firm Elliptic has launched a beta version of its transaction monitoring support for the XRP token, the company announced in a press release on 20 November.
According to the announcement, Elliptic was able to tie around $400 million worth of XRP transactions to a variety of Ponzi schemes and darknet activities, which represents only 0.2 percent of the token’s transactions.
The company stated that their findings demonstrate that the vast majority of XRP’s activity is “legitimate”.
Tom Robinson, the Chief Scientist and Co-Founder of Elliptic, commented on the findings:
“As criminal use of crypto-assets such as XRP evolves, we are committed to shining a light on this illicit activity, giving financial institutions the confidence they need to engage with the crypto ecosystem. XRP is gaining increasing traction in the APAC region among financial institutions and banks. With cryptocurrency regulatory frameworks advancing quickly, our AML solutions will help accelerate adoption in this region and globally.”
The company also revealed that it began analyzing the XRP token over a year ago, and in the process identified several hundred XRP accounts that were connected to illegal activity, “ranging from thefts to scams and the sale of stolen credit cards”.
It further stated that the beta version of its transaction monitoring support for XRP will enable users to verify if a transaction is connected to a criminal activity.
The blockchain forensic firm has also claimed to have “assessed risk on transactions worth several trillion dollars”, and in the process has uncovered cryptocurrency activities related to money laundering, terrorist fundraising, fraud, and other financial crimes.
With the addition of XRP, the third largest cryptocurrency by market value, the Elliptic platform now supports over 85 percent of all crypto-assets, by market capitalization.
Earlier this year, Elliptic released a public dataset of bitcoin transactions associated with money laundering, in collaboration with researchers from MIT. The data set was developed with data from over 200,000 Bitcoin node transactions, with a total value of $6 billion.
It was created to see if artificial intelligence could assist current anti-money laundering (AML) procedures.
- A federal judge ruled that the sale of XRP through exchanges and algorithms did not qualify as selling securities, which could have a major impact on several SEC lawsuits.
- The institutional sale of the token, however, did violate federal securities laws, and the lawsuit between the SEC and Ripple will have to go to trial.
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- These documents are seen as central in Ripple’s battle against the SEC, which in 2020 accused the company of selling its XRP token without registering it as a security.
- The documents in question are internal emails, text messages, and expert reports that followed Hinman’s 2018 speech, in which he said ETH and BTC were not securities.
- The DoJ discovered the Forsage used smart contracts with coding consistent of a Ponzi scheme, and charged its four founders with conspiracy to commit wire fraud.
- The U.S. SEC charged nearly a dozen individuals involved in the DeFi platform in August 2022, while the Philippines SEC flag Forsage as a Ponzi scheme back in 2020.