Glenn Hutchins, co-founder of Silver Lake, a leading global technology investment firm, said that bitcoin is the cryptocurrency least used in organized crime and illicit activities, unlike US $100 bills.
During his participation in the summit of World Economic Forum held in Davos, Switzerland, Glenn Hutchins, co-founder of technology investment firm Silver Lake, he pointed that 90% of high-denomination U.S. bills, specifically the $100 dollar bill, are used for money laundering and financing illegal activities such as terrorism. The American businessman and investor refuted the opinion that many government agencies, and even some users, have regarding Bitcoin (BTC), the leading cryptocurrency by capitalization in digital markets.
As Hutchins said, there is a rather mistaken view about the privacy offered by Bitcoin as a payment system and electronic cash protocol, which tends to be confused with a level of anonymity. The confusion of these concepts is what leads many today to consider that Bitcoin is a cryptocurrency that can favor terrorism and financial crimes. Hutchins highlighted the potential of the technology blockchain, the underlying technology behind Bitcoin, is immutable and transparent, qualities that do not allow this cryptocurrency be attractive to malicious actors.
One only needs to look at the history of investigations and seizures of Bitcoin by various regulators and government agencies around the world, and the recent actions of dark markets on the dark net, which have removed Bitcoin as a means of payment, precisely because of the accessibility that its blockchain offers to any agency, company or person who wants to carry out an audit or investigation.
It may interest you: LocalBitcoins integrates two Elliptic tools for cryptocurrency surveillance
Belief ignores the nature of Blockchain
According to the expert, those who assume that the main use of the No. 1 cryptocurrency in digital markets is the financing of criminal activities completely ignore the immutable and transparent nature of blockchain technology.
Although it is true that in the early days of Bitcoin, this cryptocurrency was seen as a reliable option for carrying out and financing illicit activities, when researchers and society in general learned and discovered more about how it worked, criminals and malicious actors realized that considering Bitcoin as a currency that favors absolute privacy is a mistake, and that it is not a reliable asset for successfully carrying out criminal activities.
As we already mentioned, Bitcoin has a public blockchain network, accessible to everyone, where each and every transaction made with this cryptocurrency is recorded from the beginning; and being an immutable record, all commercial operations, payments and transfers can be seen clearly and transparently within the network, without any type of variation or change. In this way, any person or entity that wants to consult a specific transaction or group of transactions can do so by simply entering the blockchain.
The reality of fiat money that everyone wants to hide
In addition to rejecting the erroneous and negative beliefs that exist about Bitcoin, Hutchins also focused on highlighting the reality of fiat money that everyone wants to hide. The expert clearly indicated that fiat money is the main source of criminal financing and illicit activities.
He also highlighted that many of the banks in the current financial system lend themselves to “laundering” dirty money from these activities, such as the recent case of Angelo Caloia, former director of the Vatican Bank, and two of the bank's advisers, who were accused of money laundering and embezzlement through this bank during Caloia's administration. Also, another recent case of money laundering is related to more than 500 million dollars from the trade of narcotics, such as cocaine; in this case, which is being led by the Australian Border Force (ABF), they are involved 9 Australian banking entities, and 7 international banks.
“80-90% of $100 bills are used for organized crime and tax evasion and there is a very good reason for this: they are untraceable and fungible.”
Hutchins countered this reality with Bitcoin, pointing out that the cryptocurrency maintains a permanent, unalterable record, so all malicious actors and criminals who use it eventually get caught.
To exemplify this, we can mention cases such as the arrest of Graham Clark and two other young people involved in the Twitter hack, who deceived users with false messages and promotions to receive bitcoins; seizure conducted by the FBI and other federal agencies into funds stored in 155 Bitcoin addresses, which were allegedly used by terrorist groups such as ISIS and Al-Qaeda for terrorist financing; dismantling of a child pornography gang in Spain that used cryptocurrency to receive payments; and more recently, the case of the arrest the two people responsible for the robbery of Bancar, a Bitcoin exchange platform based in Venezuela.
All of these cases were discovered thanks to Bitcoin's qualities and characteristics of transparency and immutability.
Less than 0,2% of bitcoins in illicit activities
The market-leading blockchain research and intelligence firm, Chainalysis, has revealed a large number of reports, and even has a real-time data platform, which shows that the percentage of bitcoins used and involved in illicit activities does not exceed 0,2% of the total bitcoins currently in circulation. This means that of the 18,6 million BTC circulating in the market to date, less than 20 thousand are linked to any illegal activity.
Source: Market Intel, Chainalysis.
The intelligence firm's data demonstrates a significant reduction in Bitcoin's attractiveness for illicit activities, compared to the 2% seen in 2019. With all this data, Hutchins concluded that “It is fundamentally incorrect to say that Bitcoin is primarily used for crime.”
Likewise, the person in charge of the Client Solutions strategy area at BBVA, Alicia Pertusa, said The percentage of fiat money used in illicit activities exceeds 5% according to UN data, while that of Bitcoin is less than 1,5%. The bank executive highlighted that the arrival of new regulations, oversight and monitoring and tracking tools is making this cryptocurrency less attractive and more traceable than fiat money.
Continue reading: Upcoming regulations for the cryptocurrency industry in 2021
