Sex, Drugs, and Bitcoin: How Much Illegal Activity Is Financed through Cryptocurrencies?

Foley, S; Karlsen, JR; Putnins, TJ

Sex, Drugs, and Bitcoin: How Much Illegal Activity Is Financed through Cryptocurrencies?

Foley, S Karlsen, JR Putnins, TJ

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Publication Type:: Journal Article
Citation:: Review of Financial Studies, 2019, 32 (5), pp. 1798 - 1853
Issue Date:: 2019-05-01

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Field	Value	Language
dc.contributor.author	Foley, S	en_US
dc.contributor.author	Karlsen, JR	en_US
dc.contributor.author	Putnins, TJ https://orcid.org/0000-0001-5731-499X	en_US
dc.date.available	2021-01-01T18:06:42Z
dc.date.issued	2019-05-01	en_US
dc.identifier.citation	Review of Financial Studies, 2019, 32 (5), pp. 1798 - 1853	en_US
dc.identifier.issn	0893-9454	en_US
dc.identifier.uri	http://hdl.handle.net/10453/132216
dc.description.abstract	© 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).	en_US
dc.relation	http://purl.org/au-research/grants/arc/DE150101889
dc.relation.ispartof	Review of Financial Studies	en_US
dc.relation.isbasedon	10.1093/rfs/hhz015	en_US
dc.rights	info:eu-repo/semantics/openAccess
dc.subject.classification	Finance	en_US
dc.title	Sex, Drugs, and Bitcoin: How Much Illegal Activity Is Financed through Cryptocurrencies?	en_US
dc.type	Journal Article
utslib.citation.volume	5	en_US
utslib.citation.volume	32	en_US
utslib.for	1501 Accounting, Auditing and Accountability	en_US
utslib.for	1402 Applied Economics	en_US
utslib.for	1502 Banking, Finance and Investment	en_US
utslib.for	1401 Economic Theory	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Finance Discipline
pubs.organisational-group	/University of Technology Sydney/Students
utslib.copyright.status	open_access	*
pubs.issue	5	en_US
pubs.publication-status	Published	en_US
pubs.volume	32	en_US

Abstract:

© 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).

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10453/132216