Remember all the worry by regulators and politicians on Bitcoin? Of course you do, similar lines are repeated from different legislators and authorities throughout the world on a daily basis. They usually go like this: Bitcoin must be regulated because it is being used for terrorism and money laundering activities. Some even state interesting concepts like some governmental officials did in South Korea: Bitcoin corrupts the youth!
Then they continue state some other sort of problems and say that, at the very least, the industry of cryptocurrencies needs to be taxed.
A significant fear always rests on the main point of money laundering, money related to terrorist organizations, drug dealers, and other individuals who delve into the global underworld.
Report proves otherwise
Well, a new report places these assumptions and rumors to rest, the report states that Bitcoin only makes up a small percentage of currency used in illicit activities.
A team of analysts from an organization called the foundation for the defense of democracies in combination with Elliptic has conducted some research, and their work has yielded some fascinating results.
The research states that a micro amount of Bitcoin transactions have anything to do with what the regulators continue to talk about. Exactly how much Bitcoin is used to transact in the underworld? Under a measly 1 %.
Is this news surprising? Not necessarily, money laundering has been going on for a long time. Sophisticated criminal organizations and individuals have devised various ways to launder money through multiple assets, like paintings, houses, laundromats, car wash businesses (see Breaking Bad) and much more. Bitcoin is the latest to be bashed due to lack of understanding and lack of information.
Where the laundering transactions took place
The writers of the report state:
“The amount of observed Bitcoin laundering [is] small and darknet marketplaces such as Silk Road and, later, AlphaBay are [generally] the source of almost all of the illicit Bitcoins laundered through conversion services.”
The researchers and analysts further clarified that a lot of these transactions were focused in on countries from the continent of Europe.
Prevention of Money Laundering
The report states that the most successful ways to prevent money laundering will be through strict measures. These measures will have to be in place from financial institutions across the board, not just cryptocurrency exchanges but banks and others too.
The Foundation for Defense of Democracies (FDD) is a non-profit, non-partisan 501(c)3 policy institute focusing on foreign policy and national security. Founded in 2001, FDD combines policy research, democracy and counterterrorism education, strategic communications and investigative journalism in support of its mission to promote pluralism, defend democratic values, and fight the ideologies that drive terrorism.
FDD transforms ideas into action and policy by focusing its efforts where opinions are formed, and decisions are made. FDD holds events throughout the year, including the Leading Thinkers series, briefings on Capitol Hill, expert roundtables for public officials, diplomats and military officers, book releases, and panel discussions and debates within the policy community.
We believe that blockchains are the future of value transfer: Wedbush and the World Economic Forum have independently estimated that by 2025, 10% of economic activity will be on blockchains. They promise to bring a new world of value exchange, but they also enable new ways to perform illicit financial operations.
Founded in 2013, Elliptic is a blockchain intelligence company. We identify illicit activity on the Bitcoin blockchain and provide our services to the leading Bitcoin companies and law enforcement agencies globally.
Clients have used Elliptic to assess risk on more than $4BN in bitcoin transactions, and we have supported active investigations with law enforcement in the US, UK, and EU.
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