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Crypto Crime: The Myths Debunked

Since its launch in 2009, Bitcoin and cryptocurrency and the whole concept of “decentralization” has been cloaked in a shroud of mystery and distrust.

For one thing, there has always existed among big business and governments the perception that crypto has no intrinsic value, which has led to the misconception that it is shady, unstable and ultimately riddled with risk.

In tandem with that was a sense of distrust that cryptos were rife for criminal activity – i.e. it would be the currency of choice for criminals.

In this article, I explain why much of these perceptions and fears are unfounded as the crypto ecosystem continues to evolve and even become part of the mainstream financial world. That despite the inherent misconception, cryptos have continued to flourish, thrive and grow exponentially, to the point that its widespread adoption is imminent.

But seeing as it is often difficult to tell the difference between fact and fiction in this fast-changing environment, here are four myths I believe can be dispelled immediately.

Myth #1 – Crypto Is Now The Preferred Payment Choice For Criminals

While it is true that the first recorded criminal case involving cryptos was on the “Dark Web,” the very fact that cryptos exist on the extremely transparent blockchain means it is actually harder for criminal activity to take place.

Yes, the whole point of blockchain and cryptos is to bypass the “middleman” – i.e. banks – which in theory does make it potentially attractive for money laundering perhaps, the fact each block on the blockchain has to be validated and agreed upon by a consensus mechanism, ensures each transaction is true and correct.

Blockchain’s are essentially, near impossible to tamper with. Cryptocurrencies use advanced coding to verify transactions and keep track of cryptocurrency data. This makes it difficult for hackers to steal or damage cryptocurrency. Encryption is an important tool for protecting information and ensuring safety.

Also, cash is anonymous, whereas cryptocurrencies can be tracked through blockchain analytics, making it very difficult for criminals to use the digital currency for illicit means.

Hence, cash continues to be the preferred payment choice for criminals.

It is also a fact that money laundering is still more prevalent via the traditional banking system, despite heavy regulation of the banks some time ago.

Myth #2 – The Criminal Use Of Cryptocurrency Is Limited To Cybercrime

It is also a fact that money laundering is still more prevalent via the traditional banking system, despite heavy regulation of the banks some time ago.

To be honest, it is not easy to verify this, because the scale and share and use of cryptocurrencies as part of criminal activities is difficult to estimate.
The criminal use of cryptocurrency is no longer primarily confined to cybercrime activities because it can involve all types of crime that require the transmission of monetary value, including fraud and drug trafficking.
However, it is still a fact criminal networks involved in serious and organised crime prefer fiat money when dealing in illicit/criminal pursuits.

Myth #3 – Illicit Funds Flow Straight From Wallet To Wallet

By necessity, any use of cryptocurrencies by criminals has to be increasingly sophisticated, through multi-step processes, often involving traditional financial institutions.

However, as cryptos and other digitalised currencies become more regulated, it will become far more difficult and risky for criminals to outwit law enforcement agencies who use the inherently traceable mechanisms through the blockchain to track nefarious activity.

Myth #4 – Cryptocurrencies Provide Anonymity

The biggest of all the myths – that crypto transactions are untraceable and entirely anonymous, therefore making it easy to pass ill-gotten gains via cryptos.

Once again, yes, Bitcoin, and other public transaction ledgers, hold a whole host of information which in theory makes tracing the person behind the wallet trickier because their “real” identity is not disclosed.

BUT… there is so much data stored when a crypto transaction takes place, such as where the money is sent to and from, the date and time, and each transaction’s value, that if suspicious activity is thought to be occurring, there are ways for the data to be traced back to the user.

On the blockchain network, every transaction is permanent and accessible to everyone who is on that network, so anyone who makes multiple transactions can find that their whole financial history becomes public information.

So, for example, if a bitcoin address were published, other users would then be able to see that person’s balance and then, from there, every transaction that ever took place. This can then leave a trail of breadcrumbs, and it is these data points that enable law enforcement to track criminal activity. These data points also give law enforcement access to more information than a criminal case involving cash.

While privacy coins and several services and techniques may hinder law enforcement investigations, it does by no means stop law enforcement from finding out who is hiding behind the crime. 

Some blockchains, such as Monero, are 100% anonymous, which paves the way for illegal activity and criminal use. But these coins are very small in number and not widely used compared to the bigger ones.


There is no denying that cryptocurrency has been used for criminal activity, but this can also be said for every different variation of money worldwide. Currently, the most popular “crime currency” is the US dollar because transactions with fiat currency (paper money), is difficult to trace compared to bitcoin, which now is extremely easy to track with systems built for this specific purpose.

If anything, it is more important to watch out for crypto scams. There is a history of platforms and startups claiming to be “the next big thing” that have in fact turned out to be phony and fraudulent and cost investors millions.

It is therefore crucial for anyone looking to invest in cryptos to research thoroughly beforehand, because in the main, cryptos are unregulated so risk is inherent.

All in all, if I were a criminal, I would probably choose something other than cryptocurrency to conduct my illicit deals.

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