The recent bust of a worldwide international paedophile ring using Bitcoin payments highlighted one of the key fears surrounding crypto-currencies -- their use by criminals. Social networking giant Facebook is keen to get in on the act by launching a digital currency called Libra. But US Treasury Secretary Steven Mnuchin has aired his ongoing opposition to the move, saying many concerns remained unresolved, including "the issue of money laundering". Despite tighter regulations and increased vigilance by the authorities, illegal activities related to virtual currencies remained "significant", Madeleine Kennedy, from the research firm Chainalysis said.
The recent bust of a worldwide international paedophile ring using Bitcoin payments highlighted one of the key fears surrounding crypto-currencies.
A Chainalysis report published in January said that in 2018, one percent of Bitcoin transactions -- the most widely used cryptocurrency -- involved illegal activities. The equivalent of $600 million was also spent using Bitcoins on the dark web, a set of hidden networks where a multitude of illicit products, including weapons and drugs, are traded. In comparison, the global turnover of drug trafficking is estimated at several hundred billion dollars. Kennedy believes the use of Bitcoins for criminal purposes was partly based on a "misunderstanding". The confidentiality reputation of the most famous cryptocurrency is unrivalled, with all transactions recorded in an unforgeable public ledger, the blockchain. But it is "more transparent than some traditional financial systems and certainly more than cash", she added.