Bitcoin is only used by criminals

“Bitcoin is only used by criminals” - I hear this a lot, both online and when talking with people who are new to bitcoin.

Just for the records, the vast majority of all crypto currency activity is not used for criminal activity and according to a report from ChainAlysis in 2021 criminal activity represents about 2.1% of the volume of crypto currency transfers. [This is around $21.4 billion]. To put that into perspective it was estimated (by the UN) that 2%-5% of global GDP is connected with money laundering [This is around $4 trillion] - this represents a factor of x200 more illicit activity associated with cash than with crypto currencies.

It is a misconception that bitcoin is anonymous, nothing could be further from the truth – have a look at any online blockchain explorer for a list of every single bitcoin transaction complete with date stamps, sending address and receiving address and you'll realise how open this technology really is. Add into that the big cryptography forensic companies like Chainalysis (www.chainalysis.com), Elliptic (www.elliptic.co) & CipherTace (https://ciphertrace.com) who assist governments and large corporations track down individuals and you have a platform that is really not suitable to laundering money. Most of the large cryptography criminals are behind bars - probably wishing they has known some of the above!

 Many of the famous ransomware criminals who have received ransom funds in bitcoin from those infected with their malware are unable to cash out their ill-gotten gains as those public addresses have become 'tainted' and law enforcement agencies are just waiting for them to cash out to a bank account which will almost certainly lead to their arrest. This inability to cash out is known in the crypto currency world as the "off-ramp" dilemma.

There are a few crypto currencies that do offer complete anonymity e.g. ZCash (ZEC), Monero (XMR), Haven (XHV) etc. and even the ChainAlysis, CipherTrace and Elliptic guys can struggle to trace their activities. Although a recent report stated that less than 0.1% of ZCash transactions make proper use of the crypto currencies ability to provide true anonymity and are therefore once again traceable! There is also very little evidence they the bad guys are making use of ZCash or Monero and as always the criminals tend to go where the money is i.e. bitcoin.

It is hard to believe, but a significant percentage of criminals use Cryptocurrency exchanges to cash out their bitcoin. Most cryptocurrency exchanges comply with Know Your Customer (KYC) or Anti-Money Laundering (AML) requirements and will simply freeze and claim all of those coins - it is believed this is how the Colonial Pipeline ransomware attackers funds were returned.

 Banks worldwide were fined around $15 Billion in 2020 for enabling money laundering! and of course bitcoin has no offices and no staff to corrupt - as they say bitcoin technology, unlike cash, is “open, public, permissionless, borderless, immutable, scarce, neutral and censorship-resistant - what more could you ask for.