It’s time to remove “illicit activities” from the FUD dice. Earlier this month, the US Treasury Department released reports indicating that the use of bitcoin and other cryptocurrencies for illicit activities is vastly overtaken by the use of traditional assets. Critics can no longer credibly present the specter of illicit activity to fend off bitcoin; now the world’s leading experts say it’s not a major threat.
The Treasury Department released three reports that identified major issues of money laundering, terrorist financing, and arms proliferation financing. Here is what everyone has said about using cryptocurrencies:
“(L) The use of virtual assets for money laundering remains well below that of fiat currency and more traditional methods.”
–“The National Money Laundering Risk Assessment 2023”, page 41
“(T)errorist use of virtual assets appears to remain limited compared to other financial products and services.”
– “National Terrorist Financing Risk Assessment 2023”, page 23
“There is no evidence that a proliferation network used a virtual asset to procure any specific proliferation-sensitive good or technology…”
–“The 2023 National Proliferation Finance Risk Assessment,” page 29
Case closed! The US Treasury staff, the authors of the report, are the best-informed and best-equipped illicit finance investigators and enforcers in the world. Additionally, the reports were reviewed by other US government partners, including the Department of Justice, Department of Homeland Security, and the FBI. There could not be a more authoritative source to convey these conclusions.
Of course, Treasury reports confirm what industry players have demonstrated for years. The most recent edition of the “Crypto Crime Trends” report published by blockchain analytics firm Chainalysis, for example, found that only 0.15% of cryptocurrency transaction volume in 2021 involved “rogue” addresses. “. The recent arrest of suspected Bitfinex hackers – and the seizure of almost 100,000 bitcoins – also demonstrates that moving large sums of money over a public network that can be monitored from a Raspberry Pi is not as simple as, well, pie.
But the reports also confirm what we know from common experience: that we use bitcoin much, much, much more frequently to store wealth and send money to family members and cut emissions and make micropayments and run away from the creepy Taliban than for illicit finance.
After the publication of these reports, if you are a journalist, or a policymaker, or an expert, or even an anon on Twitter, it is now irresponsible and downright wrong to say that “crypto” is a major vehicle for money laundering. money or financing of terrorism. The world’s top experts disagree.
Not that some won’t try to keep making that claim anyway. The US sanctions against Russia have apparently generated plenty of opportunities for cryptocurrency haters to claim it will be used to evade sanctions. All this despite the release of Treasury reports and live rebuttals from Treasury and White House officials saying all is well.
Take this recent Politics article, “Russia’s hidden tool to undermine sanctions”, for example. The sixth paragraph should lead the article: “Treasury Officials Say They’re Not Too Worried About Crypto.” And really, the story could end there. But the coin accepts speculation from an expert that crypto assets like bitcoin could be used to circumvent sanctions if they manage to bypass KYC processes. And if my mother had wheels, she would have been a bicycle.
Luckily, when the facts are on your side, you can put up a pretty good defense. Coin Center Twitter Account has recently been ground zero in the fight against illicit finance FUD, with its staff pointing out that those responsible for FinCENthe Treasury Departmentthe National Security Council and the White House all said there was no evidence that bitcoin posed a threat to US sanctions.
Their defense is a good example of how to counter speculation and fear: go back to the facts about how bitcoin is used and point out concrete examples of how bitcoin is used. empowering and protect some of the most vulnerable people in the world.
The path to follow
The three Treasury reports released this month also address the future risk that crypto assets like bitcoin could pose to America’s illicit financial regime. Looking at the risks is not a bad thing – I want my government to be aware of all the risks posed by the proliferation of public blockchains, provided they also maintain a sober assessment of the benefits.
For the US Treasury, that certainly appears to be the case. US lawmakers recognize the same; Representative Ritchie Torres said earlier this week that, “You should never define a technology by its worst uses…there is more to crypto than ransomware, just as there is more to money than money laundering.”
Bitcoin is a global, neutral and open monetary network. Anyone can use it, which means sometimes parties we despise can use Bitcoin alongside us. When this happens, the protection and promotion of the network – which is based on freedom, equality and autonomy – will always be useful. The United States Bill of Rights shows that extending freedoms to everyone is far better than restricting freedoms for everyone. Bitcoin’s growth will prove the same; I think it already is.
But the truth right now is the parties we despise do not use bitcoin, at least compared to traditional networks. Treasury reports released earlier this month state this unequivocally. As we continue to fight for this internet freedom money, it will be essential to cite these highly credible sources as evidence.
These are my independent thoughts and do not necessarily represent the views of my employer.
This is a guest post by Gyges Lydias. The opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.