CipherTrace is one of the space’s known analytics companies, and it has revealed that the digital asset’s space sudden boom could have caused the growing use of the platform for illicit purposes. The firm opined that crypto’s illicit use becomes ‘inevitable’ as the digital asset space grows globally. Bitcoin’s success and adoption have paved the path for altcoins, which has helped the industry become attractive to numerous buyers. The firm’s chief financial analyst, Jon Jefferies, explained how the space’s growth had encouraged illicit financing. Cryptocurrencies are often seen as a controversial investment as many governments and businesses see the asset as a medium where bad players finance illegal activities.
Jefferies explains why illicit use of crypto is inevitable
The analyst explained that the growth and demand for the coin make it possible for its users to evade taxes and launder money. Sources explained that his comment was imitated by the CIA’s Michael Morell, who shared a paper explaining that people exaggerate crypto use for illegal activities. Morell titled the paper ‘An analysis of crypto use in illicit finance.’
The former CIA director explained that the assets had gotten attention from criminals like most innovation but added that people’s widespread generalization was exaggerated. Another known expert, Marta Belcher, who works with the Electronic Frontier Foundation, revealed how excellent it is for members in intelligence units to see the truth about the crypto community.
Belcher opined that cash has also been used for facilitating crime, but no one has announced banning money due to its assistance for bad actors. Morell’s paper has been received with mixed feelings as many people try to understand the former CIA official’s stance. He drew attention to statistics shared by a crypto data firm called Chainalysis. The crypto analytics company explained that only a little portion of crypto use has been for illicit activities from 2017 to 2020. The crypto-related firm explained that illegal crypto use is only 1% of its total usage.
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Morell’s stance on cryptocurrency financing
Interestingly, Morell compared the minute illicit use of crypto to money’s usage in facilitating illegal activities. He shared how 2% or more of the world’s GDP affects fiat currency usage for illegal activities. Chainalysis’ Maddie Kennedy, the current senior director of communications, clarified that the statistics could go up for 2020 due to the continuous findings, which shows illegal activities aided by cryptos. It’s safe to note that Kennedy believes that the firm has uncovered most ransomware activities that occurred in 2020.
One of the most common crimes crypto has aided would be ransomware, which has grown more popular than years before. Fortunately, many countries have mandates KYC requirements to ensure the tracing of those suspicious activities. The firm shared Twitter numerous reports on money laundering and ransomware on its Twitter page, and some of the data were what Morell used for his paper. Kennedy revealed that the current demand for cryptocurrencies had reduced the percentage of its use for illegal activities. Cryptocurrencies continue to see notable adoptions as coins like Bitcoin assure holders more attractive returns.