In this article, we explore the claim that the crypto industry is “the Wild West” and merely a playground for criminals. Our goal is to provide a deeper understanding of how the crypto sector has evolved into an increasingly integrated part of the future financial landscape, as well as to highlight the actual capabilities of the underlying technology.

From the Wild West to a Regulated Financial Sector

We live in an era where digital innovation and rapid technological change have made cryptocurrencies and blockchain technology central topics in public debate. A widely repeated claim is that crypto is used primarily by criminals. While criminal activity does exist in the crypto space—as it does in every industry—technical facts and available data show that this is far from a widespread issue today.

Is Crypto for Criminals?

In the early days of crypto, a significant portion of blockchain activity could indeed be linked to illicit use. Historically, up to 20% of transactions on the Bitcoin network were associated with illegal activities. However, the landscape has changed dramatically.

Recent data from global analytics firm Chainalysis estimates that only 0.14% of total crypto transaction volume in 2024 can be directly connected to criminal activity. This figure may rise slightly as new illicit addresses are identified retroactively, but the percentage remains exceptionally low. In 2023, the number was 0.61%.

To understand context, consider the traditional financial system: Globally, it is estimated that money laundering and related crimes account for 2–5% of global GDP, of which only 0.6–1.6% is ever seized or detected. All of this takes place within conventional finance—not crypto.

A Europol report from 2022 reached the same conclusion:

“The use of cryptocurrency for illegal activities appears to represent only a small share of the overall cryptocurrency economy and seems to be relatively lower than the volume of illicit funds in the traditional financial system.”

Understanding blockchain technology makes this logical: all transactions are permanently recorded and publicly visible. This is the opposite of what criminals want. Blockchain makes it possible to trace funds much faster and more accurately than traditional banking systems allow, even across borders and within complex networks.

Moreover, both regulators and crypto companies have become far more advanced in blockchain analytics, making it easier than ever to identify and hold bad actors accountable.

Regulation of the Crypto Industry

The notion that crypto is unregulated is increasingly outdated. International organizations such as G20 and the Financial Action Task Force (FATF) have established global standards for the industry. In 2019, the first significant regulatory frameworks aimed at combating financial crime in the sector were implemented.

That same year, many countries introduced requirements for crypto exchanges and custodians to register with financial authorities and comply with strict anti-money laundering rules. These include:

In Europe, national financial supervisory authorities—such as the Danish FSA or the Norwegian Finanstilsynet—are responsible for oversight, including enforcement of the Travel Rule, which requires crypto service providers to collect and share information on fund transfers.

MiCA: A New Regulatory Framework for Europe

On January 1, 2025, the EU’s landmark regulation MiCA (Markets in Crypto-Assets) came into effect. MiCA ensures that any crypto company offering services to EU citizens must meet a comprehensive set of requirements and is subject to continuous supervision.

Beginning January 1, 2026, European crypto exchanges will also be required to automatically report customer information to authorities. Exchanges outside the EU may be required to disclose data on their EU-based customers.

In the United States, regulatory development is also underway. Stablecoins will fall under the GENIUS Act, and other crypto assets will be regulated through the Clarity Act.

Tracking Criminal Activity in Crypto

As mentioned earlier, one of crypto’s greatest strengths is transparency. Every transaction on a blockchain is fully visible and traceable, enabling sophisticated analysis tools to detect suspicious activity.

Companies like Chainalysis analyze blockchain data in real time, providing essential insights for the industry, law enforcement, and regulatory agencies.

International cooperation has also improved thanks to blockchain transparency. Several major criminal networks and terrorist organizations have been disrupted using blockchain analytics—something far more difficult to achieve when criminals rely on cash or traditional financial systems.

The Future of Crypto Regulation

The crypto industry has evolved from being associated with criminal use in its earliest years to becoming a regulated and increasingly transparent sector. Regulations will continue to expand in the coming years, with a strong focus on protecting investors and strengthening market integrity.

It is important to recognize that technology always develops faster than regulation—this has been true in every major technological shift.

Key Components of the MiCA Regulation

Transparency

MiCA aims to improve visibility and oversight of crypto companies. This includes requirements for transparency regarding ownership, governance, and transaction-related information.

Investor Protection

The regulation enhances safeguards against market manipulation, insider trading, and other risks commonly associated with financial markets.

Licensing Requirements

Any company offering crypto-related services—trading, exchange, or custody—must obtain a license and meet strict standards, including:

Stablecoins

Stablecoins—crypto assets pegged to traditional currencies like the euro or USD—will be subject to specific rules for:

Fines and Sanctions

MiCA outlines how companies may be penalized for non-compliance, including fines and revocation of licenses. The goal is to strengthen trust and integrity across the crypto market.

While some critics argue that MiCA could hinder innovation and increase costs for emerging companies, others view it as a positive step toward a more reliable and predictable market. In any case, the regulation is expected to reduce the presence of bad actors and enhance confidence in the industry.