Regulators insist on emphasizing a supposed relationship between cryptocurrencies and criminal activities as if both worlds work in symbiosis. The speech is manipulated. It is not only cryptocurrencies but money and material goods, in general, that may be related to criminal events.
The Office of Internet Security of Spain (OSI) published an article last week on cryptocurrencies, which perpetuates this matrix of disinformative opinion. Under the title “Did you know that cryptocurrencies are involved in some cybercrimes?”, The institution intends to inform its readers about this new technology and how they work.
The publication defines what cryptocurrencies are, their advantages over other payment systems and even clarifies the legal situation of Bitcoin in Spain. The document ends by mentioning the possible risks of using cryptocurrencies, relating them to cases of ransomware, money laundering, and drug trafficking.
Although the content of the article seems to want to explain in a balanced way the pros and cons of cryptocurrencies, the title, and images used to disseminate it on social networks are captivating. The institution presents cryptocurrencies for a case of very punctual negative use. It is a reality that certain criminals use crypto assets to commit crimes on the Internet. However, these are isolated cases.
Money, in all its forms, is a facilitator and motivator of criminal activities around the world. It is not a constitutive feature of cryptocurrencies, which can be used as a cover letter. It is an evil that afflicts the financial system at all levels. However, institutions such as OSI seem to want to emphasize negative uses over advantages, thus generating an opinion matrix: cryptocurrency is equal to the crime.
The formation of a prejudice
The Office of Internet Security of Spain is not the first institution that publishes an article related to bitcoin with criminal activities. Regulators and financial security experts have perpetuated this discourse over the years, considering that cryptocurrencies facilitate money laundering and terrorist financing.
For example, in 2017, the United States Senate opened an investigation to study whether terrorists used cryptocurrencies to finance their activities. James Comey, former FBI director, also stated that the use of bitcoin can complicate the investigation efforts of security agencies. Europol has repeatedly pointed out the use of cryptocurrencies in cybercrimes, underlining their growing popularity.
The worries are not in vain. Cryptocurrencies are an emerging financial technology, which does not yet have specific regulation in most countries. Because of this, there are many cases of scam, phishing, and extortion related to bitcoin today, largely sponsored by the lack of laws and information.
The well-known case of drug sales in exchange for cryptocurrencies, Silk Road, set a difficult precedent to erase in regulators’ memory. The WannaCry and Petya attacks in 2017, which generated billionaire losses, also extreme alerts in society. Also, Europol has estimated that 5.5 million dollars have been laundered in Europe through cryptocurrencies.
Cash is king
With the above, some users and experts may consider that the evidence speaks for itself and that there is a clear trend in the use of cryptocurrencies for criminal purposes. However, recent research refutes this premise.
The European Commission demonstrated that cryptocurrencies are not a criminal instrument at the service of terrorists and criminals. Also, recently Messari researchers pointed out that dollars are used 800 times more in cases of money laundering than bitcoin. For his part, Yaya J. Fanusie, an advisor to the NSA, said that although cryptocurrencies are involved in drug sales and money laundering, fiat money circulates on the black market more frequently.
Legal cash currencies are still preferred by criminals, according to Europol records and statements by economist Ken Rogoff. Cash is difficult to track, as it is exchanged person to person without leaving records on any platform. Experts have to conduct a thorough investigation with security cameras, car plates or personal documents to be able to monitor their movement. Although it is not easy to reveal the identity of a user in bitcoin or other public blockchains, you can access the transaction log of an address and track its origin.
There are plenty of examples of how cash penetrates the world of criminals since this type of theft is normalized unlike those related to bitcoin. For example, Carbanak hackers made, between 2013 and 2015, one of the biggest robberies in history collecting cash from altered ATMs. In Venezuela, street robberies decreased due to lack of cash. The purchase of drugs, prostitution, and trafficking of persons is commonly paid in legal tender paper money.
End the misinformation
The problem is not if bitcoin is used for illegal purposes, but that all kinds of money or with value can be involved in criminal activities. Money moves criminals, so no monetary alternative can be exempt from falling into the black market.
My objective with this article is not to indicate whether cash, bitcoin, gold or private property is more or less used by criminals. The purpose is to end the misinformation and manipulative discourse that cryptocurrencies are the only vehicle to carry out illegalities.
Regulators, experts, and users must be honest with the new technologies, understanding their functions and scope. The fact that criminals today are stealing bitcoin or mining on foreign computers, only proves that cryptocurrencies are money.
Because of this, there will always be users who use cryptocurrencies in legality and others in the crime. We must end the discourse that demonizes cryptocurrencies, in order to approach an educational and regulatory position that promotes their legal use, with the least possible negative impact.