Bitcoin comes out clean in money laundering report

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Finally, a report published by Messari quashes the too often repeated assertion that bitcoin is primarily used for criminal activities, especially money laundering. This is often trotted out by those who don’t understand crypto very well, as we saw at last week’s congressional hearings about Facebook’s Libra.

Messari said that they performed the research in response to recent remarks by U.S. Treasury Secretary Steve Mnuchin, who is another person close to Trump who isn’t a fan of bitcoin.

Data from Chainalysis and the United Nations Office on Drugs and Crime revealed that traditional fiat money is used 800 times more than bitcoin to launder money on the darknet. Furthermore, the results don’t take into account the amount of money laundering that is done through conventional markets.

The UN statistics are a stark contradiction to Mnuchin’s statement: “Cryptocurrencies such as bitcoin have been exploited to support billions of dollars of illicit activity like cybercrime, tax evasion, extortion, ransomware, illicit drugs, and human trafficking. Many players have attempted to use cryptocurrencies to fund their malignant behavior. This is indeed a national security issue.”

And, as CCN points out, the results of Messari’s research reaffirm what Europol had already concluded in a report titled “Why Is Cash Still King? Europol explains that practically all criminals use traditional money in their operations and that bitcoin and cryptocurrencies, in general, are not very popular among criminals: “While the world is looking with concern at the possible misuse of virtual currencies by criminals, this report may seem somewhat unusual in that it is not highlighting a new phenomenon or an emerging risk…money laundering schemes detected by law enforcement are still largely characterized by traditional techniques, in particular, the use of cash.”

The Messari report also argues that bitcoin is more stable than fiat money, stating, “In the last decade, the Fed increased currency supply by 13,664% more than BTC did.”

CCN remarks, “Perhaps this is a more objective reason to explain Mnuchin’s concerns. The impossibility of artificially increasing reserves is key to maintaining economic policies in the traditional financial system.”

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