All that high-tech blockchain tracking isn't actually stopping crime—illegal crypto deals are hitting record highs anyway.
SSRN · March 13, 2026 · 6375118
Why it matters
There is a common assumption that 'on-chain' transparency makes crypto easier to police than cash. However, this study reveals a paradox: as analytics platforms get better at identifying 'bad' wallets, criminals are outstepping them so quickly through cross-chain laundering that sanctioned flows are actually accelerating.
From the abstract
<p>Blockchain analytics has become a cornerstone of cryptocurrency anti-money laundering (AML) and sanctions enforcement, yet empirical assessments of its actual effectiveness remain limited. This paper evaluates blockchain analytics effectiveness across three dimensions detection capability, deterrence impact, and coverage gaps using OFAC enforcement data (2018–2026), industry reporting from Chainalysis and Elliptic, and qualitative insights from the author's experience developing open-source A