Research shows: Fraud in traditional finance is over 60 times more prevalent than in the crypto industry.

There may be a common perception among the public that cryptocurrency is often associated with scams, or seen as some sort of digital tokens in online games. However, according to a global blockchain industry survey in 2019, fraudulent activities are more prevalent in traditional financial markets and exceed those in the crypto industry by a large margin.

Deloitte recently released its 2019 Global Blockchain Survey Report. The report indicates that top global executives are increasingly positive towards blockchain technology and compares fraudulent activities in the cryptocurrency market with traditional financial markets.

Enterprise Adoption on the Rise

The survey conducted from February 8 to March 4 this year interviewed 1,386 senior executives.

The report shows a gradual maturation of blockchain technology with indications of growth in investment, adoption rates, and attitudes towards blockchain technology compared to the past few years.

For example, 40% of investors expressed willingness to invest over $5 million in new blockchain projects in the next 12 months, a 1% increase from 2018.

In addition, there was a 10% increase in enterprises prioritizing blockchain technology adoption compared to the previous year. The report notes:

83% see compelling use cases for blockchain, with 74% of respondents having an improved overall attitude towards blockchain.

The survey indicates a belief in the innovative potential of blockchain, yet there seem to be challenges hindering widespread adoption, such as frequently cited issues of regulatory frameworks and environments.

Negative Perceptions of Cryptocurrency

General attitudes towards cryptocurrencies still lean negative. The public seems to view cryptocurrencies primarily as dark coins traded in illegal markets, providing funds for organized crime and deceiving unsuspecting individuals through investment schemes.

Furthermore, there is a widespread belief that these illicit activities are more prevalent in the crypto market compared to traditional financial markets. However, the blockchain research firm CipherTrace released a cryptocurrency anti-money laundering report earlier this year that challenges this stereotype.

The document reveals that the crypto market lost $1.7 billion in 2018, including from exchange hacks or investor scams, marking a 400% increase from 2017.

In 2018 alone, fraud losses in the UK totaled £110 billion. A joint report by the national tax advisory firm Crowe Clark Whitehill and the Centre for Counter Fraud Studies (CCFS) at Portsmouth University also found that fraud in the traditional financial sector amounted to £3.24 trillion.

These figures clearly indicate the impact of fraud in both markets. However, traditional financial markets and regulatory bodies seem to exhibit higher scrutiny towards cryptocurrencies, often mentioning keywords like money laundering when discussing challenges posed by cryptocurrencies.

It is evident that fraud exists not only in the crypto market but in all forms of currency, including any form of assets designed for value storage and transfer.

As the crypto industry matures and interacts with the public and blockchain technology, knowledge related to private keys and other aspects will gradually become more widespread, potentially reducing the prevalence of illicit activities as mentioned in this article.

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