Cryptocurrencies are in their embryonic stage and individuals will exploit this period to profit from them for both good and bad. But, that doesn’t make cryptocurrencies any more an enabler of crime than does fiat and digital currencies. Lets us not forget, in 1995 when less than 1 per cent of the world’s population was online. The internet was nothing more than a curiosity and used by few for legitimate business. Today, the internet has grown into a useful tool for both businesses and private users.

For the most part, any serious exchange or wallet service will conduct a thorough Know Your Customer (KYC) on every new account as part of their onboarding process. That means linking personal identity to your wallet and to your bank account. Accordingly, a serious exchange or e-wallet will only transfer funds for a cash withdrawal to a connected bank account.

However, editorial stories like this one “Bitcoin Gains Value Due to Criminal Use [Only], writes a Forbes Columnist” has influenced us into believing that cryptocurrency is only used by organized crime and terrorist on the darknet. Because it provides them with complete anonymity.

Key findings of the 2017 UK’s national risk assessment (NRA) of money laundering and terrorist financing comes amidst the most significant period for the UK’s anti-money laundering (AML) and counter-terrorist financing (CTF) regime for over a decade the assessment shows that:

  • High-end money laundering and cash-based money laundering remain the greatest areas of money laundering risk to the UK. New typologies continue to emerge, including risks of money laundering through capital markets and increasing exploitation of technology, though these appear less prevalent than long-standing and well-known risks.
  • The distinctions between typologies are becoming increasingly blurred. Law enforcement agencies see criminal funds progressing from lower level laundering before accumulating into larger sums to be sent overseas through more sophisticated methods, including retail banking and money transmission services.

Also, the semiannual risk survey published by the US Office of the Comptroller of the Currency’s (OCC) stated that these cryptocurrencies pose a higher risk!

The survey mentioned that criminals are persistent in their use of virtual currencies (umbrella term to include cryptocurrencies).

As well as the role virtual currencies have in funding these criminal activities by providing anonymity for cybercriminals, including terrorists and other groups seeking to transfer and launder money globally. Likewise, the federal agency that oversees national banks in the US also called virtual currencies an operational risk due to their perceived role in facilitating and enabling cybercrime.

Techniques used by criminals are constantly changing and will continue to evolve. Criminals will use whatever means are available to them, therefore it was only a matter of time until cryptocurrency would be adopted!

However, the anonymity promised by cryptocurrency is a contradiction in itself because their blockchain reveals an entire history of all transactions for the public to see including law enforcement!

At the moment, no other currency offers more anonymity and stability for money launderers, and terrorist than fiat currency…cash is still king for the time being.

What is your opinion? Please write us your comment.

“Top Misconceptions of Cryptocurrency as a Payment System”


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