In the crypto world, a dark side lurks beneath the surface. Illicit transactions involving everything from money laundering to cybercrime are rising.
The anonymity and decentralization of crypto make it a prime target for criminal activity, and the market is struggling to keep up. According to BanklessTimes.com, the total value of illicit crypto transactions doubled in 2022.
Jonathan Merry, the CEO of BanklessTimes, commented on the report, “As the crypto market continues to grow and evolve, it’s no surprise that the criminal underworld has taken notice. The rise in illegal activity raises important questions about the safety and security of the crypto market. Furthermore, it highlights the need for increased regulation and oversight.”
Why the Surge in Illicit Transactions?
Several factors contribute to the surge in illegal activity using cryptocurrency.
Cryptos, with built-in privacy features like Bitcoin, make it easy for criminals to hide their identities and conduct illegal activities without fear of being traced. Besides, the decentralization of the blockchain means no central authority oversees transactions. Therefore, it is difficult for law enforcement to track and intercept illegal activities.
Another cause for the surge is the ease of cross-border transactions. Cryptos can be easily transferred across borders without a long process. This makes it easy for criminals to move money between countries without the need for traditional banking systems.
The lack of regulation in the crypto market also contributes to the increase in illicit activities. Many countries have yet to establish clear rules for using and trading cryptos. Thus, making it easy for criminals to operate in a legal gray area.
How to Control the Illicit Crypto Transactions
To tame illicit crypto transactions, we must consider several measures. First, there must be stricter regulations for crypto exchanges and other crypto-related businesses. This would make it difficult for criminals to use these platforms to conduct illegal activities. Implementing more stringent KYC and AML policies would make it hard for criminals to transact anonymously.
People should embrace blockchain analytics tools to track and trace illegal activities on the blockchain. These tools are critical in identifying and tracking suspicious transactions. In addition, they may enable authorities to identify and intercept criminal activities.