The use of bitcoin in criminal activities will be the death of it and other digital currencies. That’s according to the CEO of Hermitage Capital.
Speaking at the World Economic Forum in Davos, Switzerland, Hermitage chief, Bill Browder, spoke with CNBC’s ‘Squawk Box.’ In his opinion, governments ‘will eventually regulate all cryptocurrencies,’ adding:
Bitcoin and other cryptocurrencies are a way for bad dictators or criminals to bypass sanctions.
According to Browder, the idea of bitcoin being an attractive money-transferring option to criminals won’t sit well with governments.
He argued:
In the same way as you can’t take more than $10,000 out of a U.S. bank without reporting it to the government, they’re not going to allow people to take $1 million worth of bitcoin and move it from Russia to Switzerland.
It is because of this that Browder believes that digital currencies like bitcoin or ethereum will lose their ‘libertarian freedom’ that made them attractive to investors in the first place.
With the crypto market rising in interest as its value reaches new heights, it’s only natural to assume that it will attract criminals keen to circumvent legal barriers. In October, the European Union’s law enforcement agency, Europol released its first cybercrime report warning about the growing role of monero, ether, and zcash on the darknet compared to bitcoin. As bitcoin is pseudonymous it is slowly becoming less attractive for criminal activities.
According to the report, monero is becoming more popular than bitcoin due to the ‘additional security and privacy features it offers,’ adding:
Transactions cannot be attributed to any particular user/address, all coins used in a transaction are ‘hidden’ by default, and transaction histories are kept private.
Yet, while they may be an attractive option to criminals that’s not to say they are any easier to use.
Initiatives taken up by Europol and other law enforcement agencies are designed to crack down on illegal activities involving the use of cryptocurrencies. This has been aided by analytic firms such as Chainalysis who are getting better at flagging up digital hoards that are linked to money laundering or other criminal activities. By doing so, they can alert exchanges thereby preventing the conversion into fiat money.