There is still much concern amongst government regulators surrounding cryptocurrency fraud and illicit usage. Everyone is so terrified that cryptocurrencies are being used to commit crimes and engage in wrongful behavior, but according to a new report issued by Citibank, this really isn’t something that people need to be so concerned with, as fraudulent activity involving bitcoin and its digital cousins has gone down significantly over the past few years.
Citibank: Crypto Crime Doesn’t Happen as Often as We Think
At the time of writing, there are still several figures and financial heads that are oozing with worry about how bitcoin and cryptocurrencies are being used. Janet Yellen, for example, has recently stated as the new Treasury Secretary that she is considering placing limits on all BTC activity in the future considering that it is not only volatile, but allegedly opens the doors to financial misdoings.
In addition, Gary Gensler – the nominated chairman of the Securities and Exchange Commission (SEC) – has stated that the organization is looking to do all it can to combat fraud and protect investors.
However, per data from Citibank, people may be worrying just a bit too much. The report explains:
In total, just over two percent of the activity in the cryptocurrency space was linked to illicit activity in 2019, and that total was down to only 0.3 percent in 2020. However, the extent of such activity can often seem overblown based on news headlines alone.
No doubt financial crime centering on crypto has occurred in the past. The biggest examples include Mt. Gox and Coincheck, two of the biggest and most prominent crypto exchanges in Japan. Both saw hundreds of millions of dollars-worth of crypto funds disappear overnight, and to this day, much of that money has still not been recovered.
Of course, these situations occurred when less protections were in place and the crypto world was more reminiscent of the wild west. Now, things are becoming different, and illicit activity is really in the minority, Citibank assures its readers.
The document does mention, however, that while crime may be at a new low, there are still hindrances to bitcoin and crypto-based payment systems, and that adoption isn’t likely to become widespread for a while granted these problems remain. Among some of the major problems occurring in the crypto space are volatility and price swings. Citibank says:
Security issues with cryptocurrency do occur, but when compared to traditional payments, it performs better. The entrance of institutional investors has sparked confidence in cryptocurrency, but there are still persistent issues that could limit widespread adoption.
Still Some Barriers to Cross
Still, the outlook is positive as bitcoin’s persona continues to change with time. The report says:
Perceptions about what makes bitcoin important continue to evolve and create new opportunities while increasing its perception towards becoming mainstream.