Galaxy Research: The New York Times Report on Cryptocurrency Crime Fails to Fully Reflect the Reality

Foresight News reported that, according to a post by Galaxy Research, The New York Times and the International Consortium of Investigative Journalists (ICIJ) published a report claiming to have identified $28 billion in illicit cryptocurrency transactions, but noted that the traditional financial system faces even larger-scale issues. Over the past two years, $28 billion in illicit funds have flowed through major crypto trading platforms such as a certain exchange. The investigation also pointed out that funds related to North Korean hackers, Southeast Asian scam networks, and crypto cash transactions, despite U.S. sanctions and penalties, continue to be deposited on these platforms.

Galaxy Research believes that, as with most public reports on cryptocurrency and illicit financing, this report exaggerates the scale of the problem, underestimates the progress made in mitigating it, and overlooks the fact that, even though the traditional financial system has more sophisticated KYC/AML mechanisms, it still faces the same or even greater challenges from illicit activities. Based on the headline figure of $28 billion in the article, this accounts for only 0.52% of the total inflows of BTC, ETH, USDC, and USDT so far in 2024 and 2025, a figure that can almost be considered statistical noise against the backdrop of total inflows exceeding $5.3 trillions. If all tokens are included, its significance would be even less. In 2024, illicit crypto transaction volume accounts for only 0.14%–0.4% of on-chain transaction volume and continues to decline, far below the United Nations' estimate of $800 billions–$2 trillions laundered annually through the traditional financial system.