Guest Post was written by Sean Mortberg, an aspiring tech writer.
Blockchain has given criminals the perfect back alley to do their dealings. From 2013 to 2016, 97.4% of all criminal activity using Bitcoin originated on the darknet. Gunrunners, fake ID providers, hitmen, and of course the booming black market for drugs―which the now-defunct SilkRoad made $1.2 billion off of by the time it was shut down―are just some of the enterprises utilizing the benefits of blockchain.
Anonymity, furthered by more apt currencies for criminals such as Monero and Zcash, as well as the borderless nature of exchanges and encryption of data have contributed to global financial crime. It should be no surprise then that U.S. and international regulatory agencies, including the IRS, FBI, SEC, as well as intergovernmental bodies of the EU and FATF, are in hot pursuit of and cracking down on the decentralized currency world.
Mutual deals between criminals, foreign agents, and crypto coin holders are not the only thing under the law enforcement microscope. Fake ICO pages, ransomware attacks, exit scams, and even the classic Ponzi scheme have long plagued the crypto investment world. In April, German firm Savedroid raised $50 million in an ICO which turned out to be an exit scam. The founder, Dr. Yassin Hankir, tweeted from a beach while brandishing a beer much to the chagrin of investors, “Thanks guys! Over and out…” One response blatantly suggests, “It would be smart for investors to crowdfund to hire #hitmen.”
Agencies are also having trouble handling crimes dressed in a white collar―tax evasion. In 2017, 36% of Bitcoin investors willfully did not mention cryptocurrency on their taxes and in 2015, only 807 people out of the estimated 2.8 million U.S. citizens who own Bitcoin filed properly.
Learn more about the dark side of crypto with the infographic below, provided by NullTX.