ILLICIT ACTIVITIES ON THE BLOCKCHAIN SPACE
Eleven years ago, a new and brilliant invention that allowed users to store and transfer information was born-Cryptocurrency. What made this platform unique? It allowed investors to conduct transactions independent of the federal government or central banks. This was a way too enticing prospect for performing secure and quick operations while eliminating significant trust issues.
However, this brilliant idea was equally as enticing to criminals. Finally, a platform where loads of money could be moved without attracting red flags from the Securities and exchange commission (SEC), Internal revenue system (IRS), or some other federal institution monitoring cash flow. Cryptocurrency, in some sense, became a safe haven for several illicit activities.
CRYPTOCURRENCY AND THE DARKNET
The darknet is an anonymous part of the internet famous for strings of all sorts of criminal activities. The dark web is accessed by specific computer software and requires a unique keyword or authorization process. The darknet is notorious networking amidst terrorists, kidnappers, hackers, and peddlers of child pornography.
The popularization of cryptocurrency on the dark web can be traced to a popular darknet known as Silk Road. Silk Road was launched in February 2011 and is popularly referred to as the first modern darknet market. Bitcoin was the popular means of exchanging value on the platform known for countless illicit activities, especially drug trafficking.
In 2013, the website was shut down, and Ross Ulbricht—the founder of the darknet was arrested. The FBI recovered over 26,000 bitcoins from him at the time of his arrest.
Unfortunately, the use of cryptocurrency on the darknet is still growing as ever. In 2019, a report by Chinalysis predicted that darknet users would spend 1 billion US dollars in that year. The blockchain technology guarantees a pseudo-anonymous peer-to-peer method of verifying transactions. While this makes the platform unique, it is also why the use of cryptocurrency on the darknet will likely continue to grow.
CRYPTOCURRENCY IN ORGANIZED CRIME AND MONEY LAUNDERING
The insatiable need for a digitized world is the backbone for the accelerated growth of bitcoin and other cryptocurrencies. Gradually, the world is desperate to conduct business without paper money and its apparent disadvantages. This, no doubt, becomes the answer to a criminal's prayer.
Besides the various banking regulations and the government's ever scrutinous eyes, criminal organizations have always faced a cash flow problem. Now with the advent of cryptocurrency, hiding money in multiple crypto wallets without looking over the shoulders has been made easier. Sadly, unregulated exchanges and bitcoin ATMs have become the culprits in abetting money obtained through fraudulent and criminal ways.
FIGHTING THE USE OF BLOCKCHAIN FOR CRIMINAL ACTIVITIES
The blockchain space is a distributed ledger technology where all transactions are kept as public records. Previously, these unique transactions could not be traced to an origin; however, government agencies are now actively investigating the blockchain space.
There are now cryptocurrency regulation laws in almost every country. In 2019, the United States Congress proposed 22 new bills addressing blockchain regulation in businesses. Fortunately, blockchain technology is also being used to fight crime and money laundering by various federal and state governments.
Finally, In an interview with CNBC, Katherin Haun of the United states department of justice pointed out that bitcoin could enable criminal activities, but it wasn't responsible. When the internet came into limelight, several persons argued against it. They magnified its use in criminal activities, just like blockchain critics are making illegal activities the center of their anti-blockchain arguments. Indeed, just like the internet is now inevitable, cryptocurrency will someday affirm its relevance in an increasingly digitized world.