Many people associate Bitcoin and cryptocurrencies with a criminal underworld that resides on the dark web. While this was possibly true five or six years ago, the crypto scene has changed dramatically in recent times. Nowadays in order to purchase crypto, you need to go through some form of KYC process, meaning that bitcoin – or whichever crypto you buy – will be traceable back to you. It is this very process that has deterred criminals from using cryptocurrencies and instead using fiat cash, which as we know is largely anonymous.
KYC Becoming a Common Feature
Cryptocurrencies are becoming more commonplace and with more merchants accepting them, KYC protocols have been welcomed into the crypto world. It provides merchants and people accepting cryptos with an additional level of safety, knowing that the cryptos they are receiving are legitimately sourced, rather than a source of criminal income. Lorenzo Pellegrino – Skrill CEO – noted that having a strong level of KYC on its crypto trading platform was a defining feature. “Thanks to our industry leading KYC tools we also have the capability to bring on board new user quickly and safely, which is another strong differentiator for us,” he said in an exclusive interview with BitStarz News. It isn’t just Skrill implementing KYC checks, in fact Andrew Yang – US Presidential candidate for 2020 – is accepting crypto donations, but in order to do so, users have to pass through a set of KYC checks.
The Dark Web is Still a Major Player
Unfortunately, much of the dark web still only accepts crypto, which doesn’t help the cryptocurrency market fight off its jaded past. Fortunately for the DEA, they still have methods of tracing Bitcoin payments made on the dark web, which is helping with criminal convictions. However, out of the dark web criminals have been using cryptos for purposes such as paying staff, money laundering, and selling goods. This is due to the fact transaction fees are low and confirmed very quickly when compared to the traditional banking system. The DEA still has the power to trace these payments for illegal goods, and is slowly cracking down on criminals using cryptocurrency.
Bitcoin is Growing in Popularity
Five years ago, roughly 90% of all Bitcoin transactions were nefarious or crime related. However, the DEA estimates that only 10% of all Bitcoin transactions are now related to the same activities. While the number of criminals using the Bitcoin network for illegal purposes has in fact risen, so too has the amount of regular people using it. In fact, the number of genuine users of the Bitcoin network has grown so large that criminals using it are now only a tiny fraction, similarly to the fiat world. However, in the fiat world tracing large sums of cash is much harder and gives criminals the edge. This means that the crypto world is providing law enforcement a way to sniff out criminals – keeping the world that little bit safer as a result.
Interestingly, a Brazilian presidential candidate has proposed the use of blockchain technology in the voting system to ensure votes cannot be rigged or altered once they have been cast. He also hinted at the possibility of making Bitcoin an accepted currency in the country. Bitcoin certainly has a myriad of uses, and it is warming to see it being used to prevent criminals from operating freely.