Cryptocurrency adoption is highest in Eastern Europe

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New data provided to Fortune by the cryptocurrency research company Chainalysis shows that Ukraine and Russia rank first and second, respectively, in the adoption of cryptocurrencies including Bitcoin. But while the vast majority of this activity is legitimate, Eastern Europe is also plays the world’s leader role in the illicit use of cryptocurrency on darknet marketplaces and in ransomware schemes.

Ukraine ranked first globally on Chainalysis’s Global Crypto Adoption Index, which includes measures of cryptocurrency value received, exchanged, and deposited. Over one year period from July 2019 to June 2020, Ukraine sent $8.2 billion worth of cryptocurrency and received $8 billion worth. Russia ranked after that on a population-adjusted basis, sending $16.8 billion and receiving $16.6 billion worth of cryptocurrency.

Totally, Eastern Europe accounted for 12% of worldwide cryptocurrency activity in the period. The study tallied activity in more than a dozen various cryptocurrencies.

According to Roman Sannikov, a Russia specialist with cybersecurity firm Recorded Future, the high volume of legitimate cryptocurrency use in Eastern Europe is a legacy of the Soviet Union and its collapse. For roughly a decade beginning in the early 1990s, he says, former Soviet citizens didn’t have appropriate access to the global banking system. They became used to alternative ways of sending money internationally, including cryptocurrency precursors such as e-gold, even for mundane uses like eBay purchases.

People in Eastern Europe are also generally very tech-savvy, he says, while the Russian ruble has been unstable in recent years, which has added to the popularity of cryptocurrency there.

But not all cryptocurrency traders in the region are above-board. Chainalysis found that Eastern Europe was the only part of the world where a darknet marketplace- a hidden website offering illegal products such as drugs for buy with cryptocurrency- ranked among the top 10 highest-volume cryptocurrency services. The Russian darknet market Hydra ranked as the sixth-highest volume cryptocurrency service in the region, outranking well-known cryptocurrency exchanges such as Kraken and BitMEX. Chainalysis says that Eastern Europe accounts for more overall darknet market-related cryptocurrency activity than any other region.

Eastern Europe leads in ransomware payments too. In ransomware schemes, hackers lock victims’ files or computers and demand payment—usually in bitcoin and other cryptocurrencies—to unlock them. Chainalysis found that 23% of all funds sent from ransomware addresses were funneled to Eastern Europe, revealing that the region is the home to the globe’s highest-earning ransomware operations.

However, criminal applications, made up less than 2% of the activity Chainalysis tracked in there.

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