According to the business media Fortune, a new report claims that cash is used far more in illicit activities worldwide than cryptocurrencies. Cryptocurrencies initially got a bad reputation because of Silk Road, but crime figures for 2024 are very small.
The report's authors emphasized that cryptocurrencies are valuable assets in law-abiding societies.
Cryptocurrencies: Assets of Crime?
The Cryptocurrency Information Sharing and Analysis Center (ISAC), a non-profit focused on securing the cryptocurrency asset ecosystem, has released a report . Specifically, the report argues that despite the industry’s early reputation as a hotbed of illicit activity, cash is far more popular for illicit operations.
“Cash will always be king. [Cryptocurrencies] have a public, immutable ledger, which is friendly to law enforcement. Cash is much harder to trace,” co-author Robert Whitaker said in an interview .
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This conclusion supports previous industry data and explains the decline in criminal use of cryptocurrencies. The Cryptocurrency ISAC sought to comprehensively examine the history of this trend to persuade policymakers, advocacy groups, and others.
If you want to look at the history of crime in cryptocurrencies, you have to start with Silk Road . Until the site was shut down in 2013, it was used to handle nearly 20% of all Bitcoin transactions. Obviously, this infamous incident contributed greatly to its early bad reputation.
Cryptocurrency as a tool of law
However, the Cryptocurrency ISAC adds that cash is used at a much higher rate for highly sophisticated criminal methods such as money laundering. Even the most publicized cryptocurrency-related crimes, such as sanctions evasion, are small compared to the same crimes committed with cash. This is due to increased regulation around cryptocurrencies.
The report emphasizes that public and immutable ledgers make cryptocurrencies unsuitable for illicit transactions. In addition, regulations such as know-the-trade (KYT) laws turn transaction data into a useful resource for law enforcement. As evidence, the Cryptocurrency ISAC points out that cryptocurrency crime has decreased significantly over the past few years.
Read more: Cryptocurrency Regulation: What Are the Pros and Cons?
The report concludes by suggesting ways to further reduce criminal cryptocurrency transactions. The Cryptocurrency ISAC suggests focusing on global compliance standards that make it harder for criminals to find safe havens .
“To create the safest environment possible, international cooperation between regulators, law enforcement, and responsible players in the cryptocurrency industry is needed. They must work together to develop standards and best practices to address and prevent illicit activity. Only through this cooperation can the industry move forward,” the report concluded.
