Cryptocurrencies like Bitcoin are hardly being used for money laundering. According to research firm Messari criminals prefer dollars over bitcoin to launder their money. For every dollars that’s being whitewashed using bitcoin, there’s 800 dollars being washed through fiat.
In recent tweets Donald Trump suggested that bitcoin is being used by criminals. But the research numbers from Messari suggest something different. The firm is being backed by crypto investor Anthony Pompliano, who stated that criminals in the United States in 2018 laundered over 2 trillion dollars. “That is more than 6.5X the entire crypto market cap”, Pompliano wrote on Twitter.
Research has consistently been showing that money laundering and illegal activity using bitcoin, is very minimal. Especially because bitcoin and many other cryptocurrencies are traceable. The blockchain documents every move from every coin, making it possible to trace coins back to certain individuals as soon as these coins are being used to buy something at an online shop or are being cashed out in dollars or euros. Criminals are using cash, and that’s something that Europol confirms in their “Why is Cash Still King?” report.
The United Nation Office on Drugs and Crime seems to be on the same side as Europol. They estimate that $800 billion up to $2 trillion is being laundered every year.
Yet, politician and sometimes the public, still seem to worry about criminals using bitcoin or other cryptocurrencies for money laundering. They seem to forget that these same criminals are also using cash to do the same. Other technologies like smartphones, the internet, laptops, and creditcards are also being used by criminals, but nobody is banning these in the hopes of reducing criminal activities.
Also published on Medium.