Cryptocurrency Crime May Be Limited as Blockchain Transparency Could Improve Investigations, Podcast Suggests

• Crypto crime totals roughly $50 billion in scams and fraud, yet illicit use is ~1% of on-chain activity.

• Blockchain transparency gives law enforcement stronger tracing capabilities than many legacy systems.

• Zero-knowledge proofs and privacy pools can balance user privacy with compliance when designed correctly.

Crypto crime analysis: crypto crime and scams are ~1% of activity; learn how transparency and zk‑proofs cut risk. Listen and learn more with COINOTAG.

Amid headlines about hacks and scams, a deep dive on the Clear Crypto Podcast examines data on blockchain activity and the technologies improving trust and compliance in digital assets.

Crypto coverage often highlights breaches and fraud, but the underlying ecosystem shows significant lawful activity, continual innovation and a professional compliance community working to limit illicit use.

This week’s Clear Crypto Podcast episode, produced in collaboration with StarkWare and Cointelegraph (plain text), features Ari Redbord of TRM Labs and former U.S. federal prosecutor Nathan as host to examine crime trends in crypto.

What is crypto crime and how common is it?

Crypto crime refers to scams, hacks, fraud and other illicit uses of blockchain and crypto services. While headline-grabbing incidents occur, experts estimate about $50 billion in scam and fraud losses over recent years, and that illicit transactions remain close to 1% of total on-chain activity. That means most crypto activity is lawful.

How does blockchain transparency affect investigations?

Blockchain’s immutable public ledger makes transactions traceable. Investigators and compliance teams use on-chain analytics to follow funds, attribute addresses and build cases. Ari Redbord of TRM Labs notes this transparency creates stronger investigative tools than many traditional finance systems.

Traceability does not eliminate crime, but it raises the cost and risk for bad actors. Compliance teams can combine chain data with off‑chain intelligence to disrupt criminal flows more effectively.

Why do bad actors target crypto?

Bad actors favor any technology that enables rapid, cross‑border value transfer. Crypto’s speed and global reach can be attractive to opportunistic criminals. However, the same properties that enable fast transfers also allow robust chain analysis and enforcement when properly applied.

How can privacy and security coexist in crypto?

Privacy-preserving technologies, such as zero-knowledge proofs and privacy pools, can provide user confidentiality while still enabling selective compliance data disclosure. Properly designed digital identity and compliance primitives let lawful privacy coexist with investigatory needs.

Redbord emphasizes that innovations—zk proofs, privacy pools and digital identity—help “thread the needle” between user privacy and stopping state actors or criminal networks that threaten the ecosystem.

Frequently Asked Questions

How much money has been lost to crypto scams recently?

Industry experts cited on the Clear Crypto Podcast estimate roughly $50 billion in scams and fraud over the last two years, a large-sounding total that remains a small portion of overall on-chain value transfer.

How do privacy tools like zk‑proofs affect law enforcement?

Zero-knowledge proofs allow selective disclosure, enabling users to prove compliance conditions without exposing full transaction details. When combined with targeted compliance workflows, they can preserve privacy while supporting investigations.

Key Takeaways

• Scale vs. proportion: While scam totals are substantial in dollar terms, illicit activity is a small share (~1%) of total on-chain volume.
• Transparency is a tool: Public ledgers improve traceability and investigative outcomes compared with many legacy systems.
• Tech can balance privacy and compliance: zk‑proofs, privacy pools and digital identity frameworks can protect users while enabling lawful oversight.

Conclusion

Crypto crime and scams are significant in dollar terms but remain a minority of overall blockchain activity. Crypto crime can be mitigated through a mix of transparent on‑chain analytics, better compliance practices, and privacy-preserving innovations. Continued collaboration between builders, compliance professionals and law enforcement will shape a safer, more resilient crypto ecosystem. Stay informed with COINOTAG coverage and expert analysis.

By COINOTAG • Published: 2025-09-11 • Updated: 2025-09-11

Episode notes: The Clear Crypto Podcast episode features Ari Redbord, global head of policy at TRM Labs and former U.S. federal prosecutor. The episode was produced with StarkWare and Cointelegraph (plain text). To hear the full conversation, search for “Clear Crypto Podcast” on major podcast platforms or visit Cointelegraph’s podcast listings (plain text).