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Visual Objects on Cryptocurrencies and Criminality: Myth or Reality?

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On April 8, 2020, Visual Objects revealed that they had surveyed 983 people who are familiar with digital currency to learn how people perceive and use cryptocurrency 

The survey analysis found that although one-third of people think owners use crypto on illegal items, they really use it on more mundane purchases such as clothing and food. 

Even so, the reality of crypto is complicated. Many folks consider the likes of BTC and ETH as the future of money while others believe the instability of the crypto market is a deterrent factor for its widespread adoption. 

The Visual Objects survey highlighted a few interesting facts about the current state of crypto and its use amidst the general population. For starters, less than 16% of people have invested in cryptocurrency, indicating that most folks still prefer the more mainstream fiat money. Moreover, BTC is the most popular cryptocurrency people own, and about 72% of people have used crypto on day-to-day purchases.

In addition, more than 38% of people spend cryptocurrency to buy food, and 34% use it to buy clothes. Still, 26% of people have spent their crypto on more dangerous items such as weapons (15%) and drugs (11%). 

Visual Objects Has Noticed Many Believe Crypto Is Used For Criminal Activities

Unfortunately, public perception is rampant with myths and contradictory info on what cryptocurrency is and is not. Some people, according to the recent Visual Objects survey, believe that crypto is used to purchase illegal items such as weapons and drugs.  

In fact, a report by Chainanalysis in 2019, revealed that in 2019, criminal entities moved $2.8 billion in BTC to exchanges, up from around $1 billion in 2018. More than half of that went to the two most popular ones, Binance and Huobi. 

Reports such as this, along with numerous news headlines linking crypto to crime and pedophile rings, inevitably lead many to associate crypto with crime and criminals. 

As with any emerging technology, criminals will find ways to use it to further their goals. And, as with anything relatively new and misunderstood, the media and everyday folks will often be quick to shine a light on its criminality, exaggerate the risk, and undercut its utility. 

Is Crypto Really Used Extensively by Criminals?

The fact is that while reports of crime abound, the amount of criminal use of crypto is disproportionately smaller and more attention should be directed at its extensive legitimate uses.

According to data that Elliptic has collected and analyzed from the past six years, as of 2019 only $829m worth of BTC has been spent on the dark web, a mere 0.5% of all Bitcoin transactions. Compare this to the traditional financial system, where the criminal proceeds laundered annually sits between 2% and 5% of global GDP, or $1.6tn to $4 in a year. 

On the other hand, a lot could be done to reduce the criminal elements of crypto use in modern society. According to Chainanalysis, exchanges should be stricter in scrutinizing Over-the-counter (OTC) desks. This process may include the greater use of analytics tools to crack down on rogue OTC brokers limiting options for bad actors to cash out. 

Wayne Jones
Wayne is a Blockchain enthusiast and expert in crypto trading. Currently, I cover trendy issues on digital currencies.

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