- Concerns have always revolved around the crypto assets being used for illicit purposes but the US Treasury department revealed something that is beyond these doubts.
- Decentralized Finance (DeFi) and technologies that are increasing anonymity can be the potential wrongdoers, says the National Money Laundering Risk Assessment
- Fiat currency and traditional methods are still more widely used to carry out illegal trading and activities.
In early March, the US Treasury Department released a three-yearly report that revolved around the issues like money laundering, proliferation financing, and terrorist financing. And all of them revolved around digital assets.
And the crypto critics might think this is going to be all about crypto assets being broadly used in these areas. But the scenario is still inclined toward fiat currencies and traditional money, as they remain to be still used more commonly for such activities.
Money Laundering and the Asset Class
However, The National Money Laundering Risk Assessment referred to digital assets as an ever-evolving world within the money launderers’ extending toolkit for hiding their funds. They particularly referred to Decentralised Finance (DeFi) and technologies that are increasing anonymity to be the potential wrongdoer.
Reportedly, these digital assets have a considerable role to play in phishing activities and ransomware attacks, particularly at the time of the Covid 19 pandemic. These illicit users vow crypto gains to the victims to take out their private information or to inflict malware on their devices.
And after attacking the innocent victims, these attackers demand to be paid in crypto assets, where the transactions are irreversible and pseudonymous. The report sums up the idea of crypto for money laundering that their use is increasing in activity including drug money.
Saying that the US Treasury Department also specifies that fiat money remains to be the primary source of criminal activities. According to them, the utilization of digital assets for money laundering is still far below that of fiat currencies and traditional methods.
Furthermore, the report signifies that when it comes to crypto assets, it still offers an array of options for criminals. Because in one aspect, peer-to-peer transactions and self-custodial wallets can facilitate the users to evade financial control, which can generally target only traditional intermediaries.
But on the second aspect, most of the blockchains including that of the crowned cryptocurrency Bitcoin use transparent public ledgers which can make it easier to track the criminals.
This skepticism of illegal trades using crypto is hovering around the asset class lately because the Officials are concerned about Russian crypto use for evading sanctions. According to Tom Robinson, the CEO of analytics firm Elliptic, Crypto can and will be used to evade sanctions but it is not a silver bullet.
Only recently, the US Authorities were in action when Cryptocurrencies worth around $28 million were seized in connection to a former Canadian Government employee Sebastien Vachon-Desjardins who was handed over to the United States on charges regarding NetWalker ransomware.
The skepticism has always revolved around the crypto assets, but then there are also some positives that it offers, and anyway, the fraudulent manage to carry out their illicit activities, whether its crypto or fiat. But it is to look forward to what the crypto assets would witness in the future.
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Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.
Source: https://www.thecoinrepublic.com/2022/03/20/fiat-is-still-dominant-in-terms-of-criminal-money-highlights-us-treasury-department/