As a seasoned crypto investor with over a decade of experience navigating the digital asset landscape, I’ve learned to separate hype from reality when it comes to the perception of cryptocurrencies as a tool for illicit activities. The latest study by Crypto ISAC has shed some much-needed light on this topic, and I find its findings both enlightening and reassuring.
Contrary to popular belief, cash continues to be the primary method used for illegal financial transactions. On the other hand, blockchain technology provides enhanced transparency and tracking capabilities, according to recent research findings.
In contrast to widespread belief that cryptocurrencies are the primary method for illegal financial dealings, a recent study by Crypto ISAC shows that cash continues to be the preferred choice among criminals. Unlike cryptocurrency transactions which create a permanent record, cash transactions don’t leave any digital trace, thus making it harder to trace illicit activities.
According to reports from regulatory authorities and law enforcement, the amount of money laundering and terrorist funding via traditional banking methods is significantly greater than what’s seen in the world of cryptocurrencies.
Crypto ISAC
Though cryptocurrencies have been tied to crime in high-profile cases, including exchange collapses and thefts, these account for a small portion of total crypto volume. Crypto ISAC notes that while it is impossible to track the exact amount of illicit activity in the traditional finance space, the estimated amount of money laundered globally in one year is 2-5% of global GDP, or $800 billion-$2 trillion.
As a research analyst, I’ve recently uncovered some intriguing findings about the relationship between on-chain transactions and illicit activities in 2023. According to Chainalysis, a renowned blockchain analysis firm, only a minuscule 0.34% of the total transaction volume was linked to such activities.
Crypto ISAC pointed out that police forces have been leveraging the transparency of blockchain technology to identify and stop illicit activities. In this context, regulated crypto platforms are seen as valuable partners in the fight against crime. Conversely, when criminal activities occur within traditional financial systems, there’s often a lack of public resources allowing law enforcement to easily trace funds, thus complicating their efforts to apprehend criminals.
This situation shifts the responsibility for providing strong evidence onto the U.S. Attorney, necessitating them to assemble a jury who will subsequently issue a subpoena. It is only after this process that investigative authorities can start reconstructing the trail of the relevant funds.
Crypto ISAC
It has been reported by the U.S. Treasury that cash still serves as the preferred tool for money laundering due to its anonymity, reliability, and widespread availability. As stated in their February reports, smuggling large amounts of cash, frequently U.S. dollar bills moved across borders and deposited into foreign accounts, is a common practice used to wash ill-gotten gains.
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2024-10-03 14:03