A Financial Times article accusing crypto of having crime baked ignores how crypto prevents crime through blockchain’s transparency, decentralization, and efforts by crypto companies to combat money laundering and terrorist financing.

Crypto critic Jemima Kelly argues that crypto’s claim to ethical neutrality is a false narrative because crypto was designed to be censorship-resistant. 

However, human rights activist Alex Gladstein argues that Bitcoin’s censorship resistance helps citizens fight authoritarian regimes, who repress political opponents through financial control.

“Authoritarian regimes and high inflation often go hand in hand. You get capital controls and governments trying to stop their citizens using other currencies,” he told Red Bull. 

Last year, Canadian police froze the bank accounts of truckers protesting COVID-19 vaccine mandates. The truckers raised 20 Bitcoin in donations, which Canadian police only partially seized.

In 2020, anti-police brutality protestors in Lagos raised Bitcoin donations after the government froze their bank accounts. 

Companies like Notabene have developed technology to help crypto wallet companies comply with Europe’s new MiCA crypto legislation. The Transfer of Funds section requires crypto companies to record the identities of both parties involved in a crypto transfer.

Furthermore, sophisticated tools like those developed by AnChain.ai help law enforcement detect money laundering violations.

Kelly uses a recent claim by Binance’s former chief compliance officer to strengthen the argument that people use crypto exclusively for crime.

While a lawsuit against Binance makes damning claims, it is important to remember that even though such firms onboard users onto crypto, crypto is inherently decentralized.

Among other things, the exchanges match buy and sell orders for cryptos. A decentralized open ledger ultimately confirms these transactions. Criminal activity exploits corporate or security loopholes in using off-chain financial products built on the ledger’s open technology.

Stephen Diehl, the author of Popping the Crypto Bubble, told the FT exchanges have created a “dark transnational payment network.“

While crypto is not free from illegal activity, criminals are about 800 times more likely to use fiat in money laundering, says a recent Messari report.

The “Global Laundromat” scam saw $20 billion laundered through banks and shell companies worldwide. The Panama Papers leak exposed the use of shell companies to obscure wealth and avoid paying taxes. 

Citing a 2023 Chainalysis report, Kelly argued that the bear market did not prevent crypto crime from rising to over $20 billion compared to $18 billion the previous year.

While this is true, Chainalysis points out that the share of illicit transactions has been trending downward overall.

Cybersecurity firms are developing increasingly sophisticated forensic tools to track crypto criminals’ behavior. Cyver.ai is developing behavioral analysis tools to detect suspicious on-chain transaction activity. 

AnChain.ai has developed a security framework that uses machine learning to analyze bugs in smart contracts. These are the building blocks of on-chain financial primitives like lending. It is also using a multichain analytics platform. 

For Be[In]Crypto’s latest Bitcoin (BTC) analysis, click here.

The post Crypto Critic’s Allegations Ignores Industry’s Crime-Fighting Progress appeared first on BeInCrypto.

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