Criminals have used the XRP to carry out their illicit activities, although not at the same level as bitcoin, according to a new report from the company blockchain Elliptic sleuthing.
Some $ 400 million of XRP can be traced back to a variety of Ponzi schemes and activities darknet, Elliptic said in a report released Wednesday. While that may sound like a lot, it only represents 0.2 percent of the transaction XRP. By comparison, $ 829 million bitcoin, or 0.5 percent of the transaction network, has been spent in the dark web, said vendor analysis.
“Regardless of the number, it only shows that illicit activity occurred in this coin,” said Tom Robinson, chief scientist and co-founder of Elliptic. “Therefore, if you are a business deal with some of these transactions then you need to check for it because you do not want to be an organization that is being used to launder their proceeds.”
Such concerns particularly acute for XRP’s target market, regulated financial institutions. Riak, the distributed technology ledger (DLT) startup that has about 60 percent of the supply XRP and regularly sell tokens to fund operations, have thrown the bank software that utilizes XRP over the last few years.
Ripple A spokesman said: “Like other cryptocurrencies, XRP is open source and decentralized – it is available for anyone to use. Ripple enabled XRP safe transactions and through the governing body. ”
Companies forensic Blockchain like Elliptic overcome crypto involvement in such things as drugs, weapons, child sexual abuse material and ransomware-as-a-service. In the case of XRP, many transactions related to fraud and Ponzi scheme, said Robinson.
For example, large pieces recorded by the scheme Token Plus “investment”. Earlier this year, the Chinese government arrested six Chinese nationals on the Pacific island of Vanuatu suspected of orchestrating the fraud, crypto collected billions of people in China and South Korea.
Has been an increase in the use of crypto to purchase things such as credit card numbers stolen in the dark web and Elliptic has detected a number of sites receiving more cryptos XRP together.
But Robinson said that the relatively small amount of illicit use XRP may fall conjunction with traditional finance, compared with other cryptocurrencies.
“The fact that the Ripple network itself has been targeted at traditional big banks may not resonate with crooks trying to use it,” he said.
Ripple set out to provide cheap and efficient cryptocurrency bridge to connect the correspondent bank and provide near-instant cross-border payments. Back in 2015, it was among the first crypto company that received a fine from the Financial Crimes Enforcement Network (FinCEN) for the failure of AML. But this is seen as positive among the crypto industry beginners because it means Ripple closer to the set than any other crypto company at that time.
The same thing can be said for XRP in the context of having a tire kicked by Elliptic, Robinson said, because it highlights the XRP illicit activity will only increase the credibility of the network.
“Wherever you have any kind of value transfer mechanism there will be potentially some illicit use,” said Robinson. “I think having clarity and being able to know where it occurs should provide comfort bank is not a concern.”
To be clear, Elliptic dealing with XRP, crypto assets only. “We had no interaction with the company Ripple,” Robinson said.
Other major investors in the XRP is Japan’s SBI Holdings (formerly known as Softbank Investment), who also led the investment round of $ 23 million in Elliptic earlier this year.
Tomoyuki Nii, executive officer for foreign investment in SBI Investment, said in an interview at the time that the bank attracted to Elliptic because it was the best company when it comes to sleuthing blockchain XRP.
Image via Shutterstock