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Bitcoin is a Great Tool to Track Criminal Activity Worldwide


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It is no secret criminals are drawn to cryptocurrencies. Especially when it comes to Bitcoin, there are numerous reports of its association with criminal activity. This is a peculiar trend, given the transparency of the underpinning technology. The rising popularity of blockchain analysis firms will further contribute to weeding out this type of behavior.

Bitcoin Not a Tool for Criminal Behavior

There are numerous misconceptions when it comes to Bitcoin. Many government officials and analysts see it as an anonymous form of money. This is factually incorrect. It is true that a Bitcoin transaction does not involve a person’s name or physical address. At the same time, every transaction is recorded on a public ledger. Anyone in the world can see the transfer of money in real-time.

This makes Bitcoin a pseudonymous form of money first and foremost. Users can use an alias to send and receive transactions. That alias is what is known as a Bitcoin wallet address. It is this form of alias which attracts a fair bit of criminal activity. Bitcoin has become a common payment method on the darknet despite its transparent aspects.

It is possible to make Bitcoin transactions more anonymous. This can be done by converting to and from other cryptocurrencies, or by using a mixer. Even then, it is possible to identify the sender and recipient of a transaction in some cases. There does not appear to be a fool-proof method to use Bitcoin anonymously in an efficient manner. Additionally, numerous companies specialize in identifying such transactions and users.

Bitcoin Not a Tool for Criminal Behavior

The Rise of Blockchain Analysis

Over the years, an interesting trend has become apparent. Blockchain analysis companies identify users of suspicious Bitcoin transactions. BitFury is one of the companies exploring options in this industry. Government agencies around the globe are also paying more attention to these service providers. All of these ventures make it evident Bitcoin cannot be anonymous by default.

Despite this evidence, there are still conflicting reports to be read. One study complains there is a growing number of criminal activity involving Bitcoin. This is in stark contrast to a statement made in September 2018.

Yaya Fanusie, director of analysis for the Foundation For Defense of Democracies Center on Sanctions and Illicit Finance, told US Congress that Bitcoin plays no role in terrorist funding or activity. Instead, they still flock to cash and other traditional financial means. “Cold hard cash is still king,” Fanusie stated.

The native technology powering Bitcoin is a valuable tool to end criminal activity. All information is out in the public the moment a money transfer takes place. Exchanges can flag specific addresses for suspicious activity if they see fit. That also allows them to ensure the funds cannot be moved further or converted into fiat currency. The underlying technology is never to be held accountable for how people attempt to abuse the system. If that situation were different, all forms of money should be disallowed by default.

Do you think that Bitcoin can reliably be used to track criminal activity? Let us know in the comments below.

Images courtesy of Shutterstock

JP Buntinx
JP Buntinx
JP is a freelance copywriter and SEO writer who is passionate about various topics. The majority of his work focuses on Bitcoin, blockchain, and financial technology. He is contributing to major news sites all over the world, including NewsBTC, The Merkle, Samsung Insights, and TransferGo.


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