Bitcoin has Moved Past the Point of Being Labelled as a Currency for Online Criminals
Bitcoin, by its nature, is uncensorable, decentralized, and distributed, but it isn’t anonymous in any way. In reality, the open and decentralized ledger of Bitcoin has enabled all users within the network to access and make transactions transparently through different blockchain explorer platforms.
The Bitcoin exchange market and industry as a whole have matured exponentially over the past three years.
Transactions and investments in the form of Bitcoin and other digital currencies are being made on a daily basis that worth billions of dollars.
The surge in the number of cryptocurrency exchanges and platforms that are licensed by financial regulators and governments of different nations have made it easier for people to use Bitcoin, as it has created a more regulated and robust overseas market.
Why Security has been Tightened for Bitcoin Transactions
During the rise of Bitcoin, the global market has increasingly become regulated, to the extent that it has become extremely difficult for fraudsters and criminals to sell or cash-in their Bitcoins without getting a record on Anti-Money Laundering (AML) and Know Your Customer (KYC) systems. Today, both the systems are being used to stringently monitor bitcoin trading platforms and exchanges, as they are highly advanced and more secure than the systems that are used by traditional banking and financial services providers.
Through the implementation of strict KYC and AML systems in blockchains, the co-founder of Chainanalysis, Jonathan Levin, said in an interview by MIT Technology Review that for government officials and researchers, it has become quite easy to analyze and investigate blockchain data. Not only that, with the help of top-notch technologies and cutting-edge transaction untangling, transaction tracking, and blockchain analysis tools, Levin said that it has become very much possible to get trail of transactions if certain important conditions are fulfilled.
Since 2015, Europol, Immigration and Customs Enforcement, the Drug Enforcement Administration, the Securities and Exchange Commission, the Federal Bureau of Investigation, and the U.S. Internal Revenue Service, have been working in collaboration with Chainanalysis to conduct high profile investigations related to Bitcoin transactions. Levin noted that government and law enforcement agencies generally retain the services of the Chainanalysis team when they have a lead or clue, like a transaction or bitcoin address linked to criminals.
Is There Any Way to Use Digital Currencies Undetected?
However, Mike Orcutt, a senior editor at MIT Technology Review, wrote in one of his articles that there is a way for criminals and fraudsters to avoid security systems, like AML and KYC, of bitcoin exchanges and trading platforms, as well as tools that are used by Chainanalysis and other similar companies, like Blockseer. They can steer away from Bitcoin, and use Monero, Zcash, and similar cryptocurrencies instead, as they are designed to confine digital transactions and hide their trails.
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