RT Article
T1 Sex, drugs, and bitcoin:How much illegal activity Is financed through cryptocurrencies?
JF The review of financial studies
A1 Foley, Sean
A2 Putnins, Talis
A2 Karlsen, Jonathan R
LA English
YR 2019
UL https://krimdok.uni-tuebingen.de/Record/186611641X
AB © The Author(s) 2019. Cryptocurrencies are among the largest unregulated markets in the world. We find that approximately one-quarter of bitcoin users are involved in illegal activity.We estimate that around 76 billion of illegal activity per year involve bitcoin (46% of bitcoin transactions), which is close to the scale of the U.S. and European markets for illegal drugs. The illegal share of bitcoin activity declines with mainstream interest in bitcoin and with the emergence of more opaque cryptocurrencies. The techniques developed in this paper have applications in cryptocurrency surveillance. Our findings suggest that cryptocurrencies are transforming the black markets by enabling black e-commerce. (JEL G18, O31, O32, O33)
DO 10.1093/rfs/hhz015