Bitcoin & Crime!

Bitcoin is many times questioned to be the criminal’s currency. There is a lot of debate among nations on whether the cryptocurrency is playing an ally of criminals in illicit activities. The crypto does offer a great amount of privacy when it comes to transactions via blockchain technology. This is a great advantage on the criminal’s side as the lack of interference by government is exactly what they crave for.

Criminal revenue

In a report by Chainanalysis we can see that the funds received by criminals has been used for which type of crimes. How much funds have been received. And what type of crimes are usually done using crypto.

Source

As we can see that the most common usage of Crypto by criminals is for scamming. Con artists love crypto because it becomes difficult for authorities to track them down. Same case for what’s termed here as ‘darknet market’ which means the Darkweb which is not used for scamming people but rather for buying and selling goods which are deemed illegal by the government. These are used for nefarious causes such as sharing illegal files, stolen or hacked data, and even by more extreme criminals such as drug dealers and hitmen.

In 2020, the usage of crypto for ransomware has increased greatly. Even though it still is just 7%, it has had a 311% increase from last year which is concerning.

The percentage changes can be seen here:

Source

Comparison with other liquid assets

Crypto does lead to crimes and is also favored by thugs around the world. But the crimes done by crypto — especially Bitcoin — remain relatively low. The vast majority of crimes are done through government backed fiat currencies. And this doesn’t mean that the government will stop printing their currencies.

The same report which talks about the percentage of crypto being used for nefarious purposes also say that:

“Identified cases of laundering through cryptocurrencies remain relatively small compared to the volumes of cash laundered through traditional methods. However, in one major case, a significant cyber-crime group is estimated to have converted stolen funds obtained from ATM cashouts into cryptocurrency. The raft of alternative cryptocurrencies that offer greater anonymity, as well as services like mixers and tumblers that help obscure the source of funds by blending potentially identifiable cryptocurrency funds with large amounts of other funds, could boost the appeal of cryptocurrency for nefarious purposes.”

The report clearly raises concerns that crypto might be more appealing for criminals in the future. Note that the report is from 2020.

Using crypto after a crime

The same report under the points 3.4.6 and 3.4.7 raises two important techniques used by criminals after gaining crypto.

The first technique is using a crypto card which helps convert the coins into regular fiat currency almost instantly and digitally. The other way is to convert this into a tangible asset by purchasing something like art, gold, watches, property, etc.

The report was made in 2020. And ever since then the discussions on crypto have increased many-fold. Due to the Elon Musk mania the attention towards crypto is more than ever before. This is a time when regulators need to be more focused on how to deal with the crypto market.

Aman Vaniawala

Written by Aman Vaniawala

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