MIT’s AI Lab Scrutinizes 200,000 Bitcoin Transaction, only 2% Found To Be Illicit

There has been a lot of talk around the misuse of Bitcoins, especially after US President Donald Trump’s tweet on the apex cryptocurrency, stating that it is a used for illegal activities like drug trafficking and money laundering. However, recent research by Massachusetts Institute of Technology suggests that just about 2% of Bitcoin is used for illicit transactions.

The research was jointly conducted by the MIT and Blockchain Analytics firm Elliptic, at the MIT-IBM Watson AI Lab. Machine learning technology was implemented to study 203,769 Bitcoin transactions, out of which only 2% were deemed illicit. 21% of these transactions were considered as lawful, while 77% stay uncategorized. Speaking to reporters, Elliptic co-founder Tom Robinson said,

A big problem with compliance, in general, is false positives. A big part of this research is minimizing the number of false positives. The key finding is that machine learning techniques are very effective at finding transactions that are illicit.

Elliptic has worked with law enforcement authorities of various countries in the past to identify illegal usage of crypto assets. The current collaborative research was aimed at deriving patterns which could help in segregating unlawful Bitcoin transactions from the lawful ones, particularly those carried out by unknown entities, and individuals out of the banking scope.

MIT researcher Mark Weber stated that they were publicizing results of initial experiments, only to solicit feedback from crypto experts. He further said,

We are also hoping the release of the Elliptic Data Set inspires others to join the effort to help make our financial systems safer by developing new techniques and models for AML.


The results depicted are in line with earlier research conducted by analytics firm Chainslysis, which claimed only 1% of Bitcoins were used for illicit activities. The results, not surprisingly, show that cryptocurrency is used much less for unlawful activities, than the US dollar. Research conducted and published by the American Institute for Economic Research in 2017, claimed that over one-third of the total USD in circulation were used for unlawful activities.

David Cox

David is a finance graduate and crypto enthusiast. He projects his expertise in subjects like crypto and Blockchain while writing for CryptoNewsZ. Being from Finance background, he efficiently writes Price Analysis. Apart from writing, he actively nurtures hobbies like sports and movies.

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