These days we're made to read things like "terrorists use crypto and blockchain to move dirty cash around" or simply that crimes are being funded with crypto assets these days, but is that really the truth?
Criminal are not always dumb
The U.S. Department of the Treasury released a new report on Thursday outlining what it argues are the illicit finance risks inherent to decentralized finance (DeFi).
The Treasury Department says criminals are taking advantage of DeFi platforms that aren’t compliant with US anti-money laundering (AML) and countering financing of terrorism (CFT) regulations
What I find disturbing here is that there might actually be decentralized finance platforms that are complaint with this agencies and I wonder how that even comes to be because what the hell does an ecosystem powered lines of codes that ain't affected by law have to do with law enforcement agencies, but OK, let's actually look at their statement:
“The assessment finds that illicit actors, including ransomware cybercriminals, thieves, scammers, and Democratic People’s Republic of Korea (DPRK) cyber actors, are using DeFi services in the process of transferring and laundering their illicit proceeds.
To accomplish this, illicit actors are exploiting vulnerabilities in the US and foreign AML/CFT regulatory, supervisory, and enforcement regimes as well as the technology underpinning DeFi services. In particular, this assessment finds that the most significant current illicit finance risk in this domain is from DeFi services that are not compliant with existing AML/CFT obligations.”
The Treasury Department says that even decentralized financial institutions are required to adhere to the Bank Secrecy Act, which it claims many DeFi platforms fail to do. - The daily HODLing
While I understand that a couple of cash flowing through cryptocurrencies may be dirty cash, I also believe that it doesn't call for any alarm because these channels will not be leveraged much for a lot of reasons.
For starters, we're talking about a public database that basically anyone can play around the data that is posted to it, so you're telling me that these intelligent personalities will risk being figured out by the open community due to stupidly using crypto to move that much cash? That's just bullshit.
The data will always connect, inevitably, one just has to look hard enough and there's really nothing privacy coins or coin mixers can do right now to change that. The anonymity of crypto transactions is a huge myth, sure, if I move $100 here and there, nobody is going to care because that's too small a cash for anyone to give a damn, but say I attempt moving over $400 million, you really believe there ain't already numerous bots and systems watching the blocks to detect such transactions?
Don't kid me, some are these systems are set up for trading purposes but can still be used to push legal actions while the others are basically set up to monitor these unusual activities for the purpose of putting pins of suspicious fund transfers that may originate within the crypto ecosystem or may have connections with the outer world.
So no, these people are not that dumb, crypto just complicates things for them and the use of blockchain just makes it even more difficult to do business. Crypto and blockchain isn't essential for moving illicit money, it is quite the opposite thus something that will prove very valuable for fighting money laundering.