Cryptocurrency has had its share of detractors since the first token launched some years back. Over the years the number of detractors has increased, but their complaint hasn’t.
They all sing the same tune—liking digital assets as tools that help criminals and money launderers. So far, even the President and top government officials have used this same line to undermine crypto. A recent study has shown that things are far from what they seem.
New research from cryptocurrency intelligence firm Messari has shown that contrary to public consensus among crypto’s detractors, fiat currencies are still the preferred currency of choice for money launderers and other bad actors on the Dark Web.
The report cited sources from both the United Nations Office of Drugs and Crime and blockchain analysis firm Chainanlysis. According to the report, the ratio of Dark Net money laundering operations carried out with fiat currencies compared with crypto assets is a staggering 800:1.
Proving Uncle Sam Wrong
The research was carried out in light of criticism from Mr. Steve Mnuchin, the Secretary of the United States Treasury.
In a press conference convened last week, Mnuchin had echoed the sentiments of President Donald Trump, claiming that “Cryptocurrencies such as Bitcoin have been exploited to support billions of dollars of illicit activity like cybercrime, tax evasion, extortion, ransomware, illicit drugs, and human trafficking.
Many players have attempted to use cryptocurrencies to fund their malignant behavior. This is indeed a national security issue.”
I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air. Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity….
— Donald J. Trump (@realDonaldTrump) July 12, 2019
However, as this report notes, it would seem that I the criminal industry, crypto assets are bested as the “legal tender of choice,” once again falling behind cash.
While Mnuchin’s statements were damning, he did also point out that the Trump administration could enforce crypto regulations in the future, per an interview with CNBC’s Squawk Box.
For now, Crypto’s the Lesser of Two Evils
Of course, both parties are right. On the part of Mnuchin, his assertion that crypto assets are linked to money laundering and other illegal activities is correct, as supported by recent reports here and here. But Messari’s report did one better. You can’t point the finger at crypto as a tool in the hands of money launderers, without pointing two fingers at cash too.
It also seeks to refute the claim of many that the establishment is a “cleaner” system than that being ushered in by crypto assets. It’s the same way anyone looking to argue about banks structure and seeming crime aversion won’t like to hear that a cargo vessel owned by JPMorgan Chase was recently seized with $1.3 billion worth of cocaine on it.
In contrast, only about $500 million in crypto assets has been spent by criminals since the year started.
They’re both terrible, but we can at least see which is worse. For now, we can put the “crypto is for criminals” rhetoric to bed.
Understandably, a lot of people believe that crypto assets are dangerous for the financial system, and there are multiple arguments to be made for this point. However, painting the assets as tools in the hands of criminals at this point has become mute.
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