Apart from testing investors emotional cycle, bitcoin price has dropped to $9,600 in a very short time but views of United Nations official on bitcoin and cryptos has started a new debate. UN cybercrime chief, Neil Wals stated that criminals involved in online child sexual exploitation are hard to get as different platforms are now doing transactions in bitcoin and other cryptocurrencies, which according to him are difficult to trace. But is it really the case or he just blamed bitcoin for United Nations own failure?
In addition to child exploitation, he mentioned that the bad actors involved in other crimes such as money laundering, cyber-crime and terror financing are also difficult to catch because of the bitcoin, as investigators are facing problems in finding a solution to tackle all crimes that made use of cryptocurrencies.
Besides volatility, the use of cryptos for illegal practices has undermined global crypto adoption. To explore how the aforementioned practices have impacted governments, BlockPublisher reached out to Jeff Stollman, a principal consultant at Rocky Mountain Technical Marketing. In this regard, as opposed to UN executive, he clearly pinpointed how easy is it to track blockchain transactions using analytical techniques and stated:
“While headlines in the cryptosphere are generally negative, cryptocurrencies currently represent only a small niche in the overall financing of criminal and terrorist activities. Major governments are requiring Know Your Customer (KYC) and Anti-Money Laundering (AML) processes for transactions within their jurisdictions. This reduces some of the imagined privacy of using cryptocurrencies for payments, but can actually provide better monitoring and control of criminal currency flows than the controls currently used for fiat currencies. This is because all transactions are recorded on the blockchain. And most blockchain transactions can be traced back to the parties involved using various analytical techniques available to anyone.”
Particularly regarding cryptocurrencies, the UN executive blamed cryptos to provide anonymity to the criminals. Furthermore, he talked about problems for investigators as most of the cryptocurrency users are very much anynymous. Meaning that unveiling the identities of sender and receiver is very difficult to get.
UN executive stated that the primary motivation of all crimes and ill practices are monetary gains. Talking about his past cases, he stated that people abusing kids do so to get paid. He explained that pay-per-views of kids and even infants are live-streamed to make money.
Moving ahead, he mentioned the methodology adopted to tackle crimes. As most people are driven by gains, he suggested that the best way to fight crime is to take out the profit and award of the crime. By doing so, the crime can be made meaningless and useless for bad actors.
But when the same principles were applied to bitcoin and other cryptos, the model for fighting crime collapsed. Wals explained that a similar approach couldn’t be extended to cryptocurrencies because crypto transactions can’t be stopped or controlled. Consequently, identifying beneficiaries has made it very difficult by the use of cryptocurrencies .
Wals revealed that he is currently forming a team to encounter problems caused by cryptocurrencies. Efforts are being made to recruit various professionals from different fields such as law, philosophy, technology, etc, to discuss the problem and devise an efficient and effective solution. Policies and actions finalized by the Financial Action Task Force (FATF) to minimize the level of secrecy offered by cryptos are also analyzed.
Nowadays, bitcoin crimes and frauds are on the rise. It was recently revealed that bad actors capitalizing bitcoin are expected to make billions of dollars from illicit practices in 2019. Up till now, bitcoin of more than half a billion dollar worth has already been spent on the dark web.
Apart from buying drugs and prohibited substances on the dark web, people are even reaching out to the dark web for hiring hitmen and devising murder plans. Recently, a woman paid $12,000 worth of bitcoin to a company for killing the wife of her lover. Similarly, a married guy hired a hitman with $6,000 worth bitcoin to kill the boyfriend of his lover.
When inquired about the possible solutions needed for eradicating or reducing the evil practices of bad actors, Stollman emphasized on regulations for limiting the privacy of crypto users and said:
Requiring and enforcing KYC/AML on all large transactions can solve the problem if the guidelines are following globally. Cryptocurrency zealots will complain such regulations remove the privacy that is one of the envisioned benefits of cryptocurrencies. They are correct. But governments hold power. And they are reluctant to give it up.
As privacy and anonymity are signature traits of cryptocurrencies, finding an optimum solution at this stage is quite difficult. Although blockchain technology has been around for only about a decade, it is still considered as a nascent technology with many aspects still unexplored.
However, with time, challenges for the regulators and authorities are rising and it would be in the best interest of people that a solution to these problems is found soon. But, UN official’s remarks regarding bitcoin or other cryptos transactions difficult to probe can easily be nullified.