I am into the crypto field since late 2016 and I started more strongly into 2017. The first association of thoughts made with cryptocurrencies was “Money Laundering” because they were seen as an anonymous form of money.
At first, cryptocurrencies are pseudonymous and they are not completely anonymous. Let’s take the example of Binance: until not much time ago you could register a free account with no KYC with just a limitations of 2BTC per day of deposit/withdrawal from the account.
I guess that some wrong guy made its cryptos passing through a Binance account, they received some kind of investigation and they managed to show that they were not colluding with the bad guy. The bad guy may have had some troubles, they eventually paid a fine and they decided that everyone using Binance was asked to file the KYC.
Anyway, Messari in 2019 created a report that does not give much room to doubts:
Title from https://www.ccn.com/fiat-money-outpaces-bitcoin-by-8001-for-nefarious-activities-report/
This Report is from July 21st 2019, where Messari demonstrated, thanks to Chainalysis that Bitcoin gives chances for illicit activities for a volume that is 1/800 the one from Fiat currencies.
Image from https://messari.io/c/research/bitcoin-in-the-grand-scheme-of-things
So, still in 2019 when cryptos were still a dense jungle, they were not the leaders for illicit activities. And if we think that from 2019 Binance has started a flat KYC for all users and many more exchanges have had to adapt their KYC policies?
I do not think that the regulation trend has allowed Bitcoin to increase the ration against fiat currencies for illicit activities and I guess that it has even decreased.
If we also have a look here, at the image beneath we will surely get some doubts
Since dirty money is not so easy to convert into cryptocurrencies since the receiver of the dirty money would have to justify this income or find another person eager to receive it (and justify the income).
With this article I do not intend to stimulate any kind of illicit activity or Money Laundering, but it’s clear that some activities with a lot of circulating cash are more suitable for this kind of “black transactions”. By the way, those activities have also more strict checks from local financial authorities. So, make this circle happening is not so easy as they try to make readers believe.
Another attempt to convert “illicit money” into cryptos is through local exchange and local exchangers. This could be widely carried out with LocalBitcoin but lately they also integrated more strict regulations upon transactions between cash and cryptos.
What is your thought on the matter? Do still feel that money laundering is an existing preconception among new-crypto-comers?
Cover image Credits: https://www.pymnts.com/legal/2018/bitcoin-trader-indicted-money-laundering-charges/
