Business

Erik Gibbs

Further evidence that crypto is not a criminal’s playground

Here’s how it happened. Bitcoin Core (BTC) was created and billed as an anonymous form of payment. This gave criminals the bright idea of using cryptocurrency as a method of facilitating their nefarious actions, despite Bitcoin itself never having been designed for illegal activity. Mainstream press (AKA, fiat supporters) jumped on the connection between crypto and illicit transactions and used it to push their agendas. Without ever being bothered to learn the truth, people jumped on the bandwagon and decided that crypto was bad. Fortunately, the truth is out there and there are those willing to bring it to light. Several studies have already proven that criminals and terrorists still prefer good old-fashioned fiat money for their activities, and a new study provides further evidence to support this.

Only 2% of more than 200,000 transactions reviewed by the Massachusetts Institute of Technology (MIT) were found to be related to illicit activity. MIT’s MIT-IBM Watson Artificial Intelligence (AI) Lab conducted the study, using machine learning to look at 203,769 BTC transactions worth a combined ^ billion.

The AI platform was used in order to determine whether or not machine learning could be a valuable took in helping anti-money laundering (AML) rules as they pertain to crypto. That same AI should be used for big bank transactions, which are more hidden than those on crypto blockchains.

21% of the transactions were deemed “trustworthy,” with only the 2% being identified as associated with something illegal. Another 70% were not able to be classified due to limitations in either the data or the AI platform.

The results are similar to those released recently by Chainalysis. The data analytics company asserted that it had found only 1% of all transactions this year to be related to illicit activity.

Even Russia’s central bank confirms that the majority of criminals won’t use crypto for their money needs. The bank’s Artem Sychev told the TASS media outlet, “In the Russian Federation, this is used very rarely. Yes, sometimes cryptocurrencies are used to withdraw funds, but now it is not massive, because it is much easier for an attacker to get cash.”

MIT’s AI platform conducted the research with the assistance of Elliptic, a blockchain analytics firm. The company is often used by law enforcement agencies across the globe in order to identify illegal crypto activity, and the study was designed to further enhance AML oversight.

Mark Weber, who authored the results of the study and who is a member of the AI Lab, states, “The recent 1Malaysia Development Berhad (1MDB) money laundering scandal robbed the Malaysian people of over $11 billion in taxpayer funds earmarked for the nation’s development, with mega-fines and criminal indictments for Goldman Sachs among others implicated in the wrongdoing. The even more recent Danske Bank money laundering scandal in Estonia, which served as a hub for an estimated $200 billion in illicit money flows from Russia and Azerbaijan, similarly extracted an incalculable toll on innocent citizens of these countries and served implicated institutions like Danske Bank and Deutsche Bank with billions of dollars in losses.”

All of those were fiat-related cases by established multinational organizations who have reportedly been responsible for adhering to AML policies for decades. Crypto can actually make the entire financial process more transparent because, in the case of a crypto such as Bitcoin SV (BSV), every aspect of the transaction is stored on the blockchain. If lawmakers are truly concerned with preventing money laundering – which they use as their excuse for stopping crypto – then they need to turn to digital currencies more, not less.

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