One of the major things that are holding back cryptocurrencies from mainstream adoption is its ties with the darknet and illicit activities. The anonymous nature of cryptocurrencies, that has drawn millions of tech enthusiasts to this space, has also made it the perfect tool for those trying to avoid the eyes of the regulators.
Over the past years, the use of cryptocurrency market sales in the darknet has shot up, with a 70% rise in 2019, to over $790 million worth of bitcoin and other cryptocurrencies. Besides this, modern pop culture has also showcased Bitcoin as the currency of the dark web, making another mark on the token’s already controversial reputation amidst non-enthusiasts.
Furthermore, the crypto industry itself has been plagued by scammers and hackers that come up with new ways to dupe crypto holders off their funds. 2020 itself has seen multiple cases of hacks, scams, and illicit use of cryptocurrencies for activities like money laundering.
Should crypto be blamed?
According to a recent Forbes report, a New-York resident has recently been charged and arrested for laundering money using Bitcoin, along with other charges regarding hacking and trafficking credit card data.
28 years old, Vitalii Antonenko, has been accused of hacking vulnerable networks that contained credit and debit card information and then selling the stolen data on the darkweb. Antonenko is also said to have a number of co-conspirators aiding him.
The proceeds from the black market sales were supposedly laundered using a combination of Bitcoin as well as bank and cash transactions. The authorities recovered two Bitcoin wallets which had been used for transactions totalling $94 million. Over $140,000 was also funnelled to wallets controlled by Antonenko.
The accused has been indicted by the U.S attorney’s office and could see a jail term of 20 years with a fine up to $500,000.
In another money laundering incident, an Australian woman was arrested for illegally operating an unregistered exchange that has been acting as a money-laundering syndicate. The accused was arrested with AU$18,200 worth of Bitcoin in her possession and was believed to have laundered AU$5 million ($3.23 million) worth of Bitcoin till date.
These events are just a fraction of what has happened and what’s happening, with cryptocurrencies taking the blame. A University of Sydney report estimates that almost 46% of illegal activity per year is associated with Bitcoin.
It is quite ridiculous to blame technology, for crimes that could have come into play using other alternatives as well. On the other hand, cryptocurrencies are completely transparent, and with the help of the right tools, can be tracked seamlessly. Cash, however, can’t be tracked.
While the crypto industry is still in its infancy, it continues to transform how we perceive money. In order to keep disrupting the global economy and attain mainstream adoption, the technology needs to be regulated, and people must be educated on how this works.