Get Into Cryptocurrency Trading Today

Started a few years back as an electronic mode of exchange, cryptocurrency has grown so much, threatening to become part of the mainstream economy. While the coin comes with multiple pros, one concern that sticks is its use as an enabler of financial crimes. 

Most entities have discussed the role of cryptos as a medium of exchange by criminals due to their anonymity. They claim the coins are instrumental in activities like drug and narcotics trade, human trafficking, and terrorism. 

While most users are buying the information, you have to understand whether the coins are as effective in financial crimes or not. 

The Prevalence of Financial Crimes Using Cryptos 

The kind of press the financial crimes involving cryptos gets might make you think it's overwhelming when it real sense it is not as widespread. According to Chainalysis, one of the leading Bitcoin transactions tracking firm, the amount of Bitcoin used in darknet was $601 in 2019. This being an increase of 60% from the previous year. 

While the figure might seem high, it is barely 1% of the total Bitcoin transactions. 

However, there is still a claim that the figures from Chainalysis might not be so accurate given the anonymity of cryptocurrencies. 

Anonymity in Cryptocurrencies and How to Manage It 

The anonymity of the crypto transactions is the main drive behind the claim of fraud. Everyone wants to keep their money with them and spend it without any scrutinizing. While it might be the best-case scenario for consumers, the governments won’t hear any of it. 

Even though it supports anonymous transactions, some of the cryptos can still manage to provide details if need be. For example, the blockchain systems of Bitcoin keeps nodes and codes that can reveal the location of transactions and other information.

It means that if Bitcoin were to engineer as many crimes as claimed, locating perpetrators is possible. 

The only concern is that several more crypto coins are coming up with anonymity as the main selling point. For example, newer altcoins like Monero are coming up to scale privacy in transactions further. Ethereum is also likely to launch a version 2.0 with anonymity as the highlight. 

Even though privacy seems to be a grave issue with crypto, there are still ways to manage the economy, for example, at the points of changing the crypto into fiat currency. With proper systems, the government can regulate the crypto transactions.

Several analyses have already shown how the FBI can still trace the transactions. 

Is Crypto as Bad as Portrayed?

To understand how exactly crypto is impactful on crime, you only need to look at its year of inception and the history of financial crimes. While the first crypto, Bitcoin was used in 2009, financial crimes have been part of the system.

Bitcoin came as a result of the fiscal 2008 financial crises.  It was invented to avoid the issues that come with mishandling of the money markets leading to a crash. 

While crypto seems to be the ideal transaction method for terrorists, it is not the idea behind the sects. Almost all Americans and every other elite in the world understand 9/11 and its devastating effects. By then, nobody had envisioned electronic money, let alone cryptos.  

The same applies to money laundering. The economy is awash with several money laundering schemes. If at all the crypto would aid in it, then not at any high levels. Money laundering is a traditional financial crime that cannot be resolved by regulating a new currency. 

Like cryptos, the other currencies also have their fair share of financial crimes. For example, most people evade banking systems by using cash. Cash is less traceable without going through the bank.

The fiat currency is easily manipulated by the government to sell a particular narrative or decide who benefits from it. Credit and debit card scams are also not a few.

That is to say, crypto is not as bad as the government and the banking system claims. It seems they are more afraid of the impact of such coins than any other thing. Once users start controlling their money, the government would miss on tax.

The banks would also lack cash for different services like loans without customer deposits. The only way to stay safe, therefore, is to fight the coin before it becomes anarchy. 

Bottom Line 

Looking at it from the face value, the concern that crypto is fuel to financial crimes holds ground. With all the anonymity and lack of details, criminals can easily hide behind the coins to conduct illegal activities. However, when you look into it more in-depth, you realize there is more to financial crimes than the cryptos.

Ultimately, maybe instead of the government and the other financial institutions fighting crypto, they are better off looking for systems to ensure accountability with the coins.

With the developed technology, crypto is an idea whose time has come. No amount of mudslinging will derail its uptake. 
 

Buy & Sell Cryptocurrency Instantly