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DEA: Transactions Are Dominated by Investors


One of the reasons usually used by regulators why crypto activity should be banned or even regulated is the possibility that it can be used by criminals in their illicit activities. And for this reason, strict measures were imposed on cryptocurrency exchanges. Now, those who open an account on cryptocurrency exchanges need to provide identification.

Recently, a Drug Enforcement Agency (DEA) agent noted that Bitcoin’s role crimes dropped significantly to just 10% of transactions. On the other hand, transactions have grown tremendously.

DEA special agent Lilita Infante started seeing Bitcoin popping in her cases around five years ago. In the past, 90% of transactions in cryptocurrencies involved criminal activity according to her analysis of blockchain data.

Did Criminals Stop Using Bitcoin?

This doesn’t mean though that criminals stopped using Bitcoin. According to Infante, “The volume has grown tremendously, the amount of transactions and the dollar value has grown tremendously over the years in criminal activity, but the ratio has decreased”. She also added that “The majority of transactions are used for price speculation”.

This statement contradicts the perception that Bitcoin and cryptocurrencies were mainly used by criminals. However, it is true that it is still being used in criminal activities. With no company to be subpoenaed for an investigation, it is still a preferred option for a lot of criminals.

A Ban on Coins That Offer Anonymity

Japan has been known for leading the crypto industry when it comes to providing regulations that can be a great example to other regulators.

For one, Japan issued a ban on coins that offer extra anonymity to its users. This includes Monero which is a cryptocurrency usually associated with illegal activities and racist groups. According to Infante, they still have “ways of tracking them” pertaining to the likes of privacy-focused cryptocurrencies such as Monero and Zcash. And also, though it offers lower transaction fees and faster transaction times, many still prefer Bitcoin simply because altcoins aren’t liquid enough.

There are individuals and groups involved in money laundering and drug trafficking that make use of over-the-counter and peer-to-peer exchanges.

She expects that criminals will continue on using cryptocurrencies, but that is fine with her. She mentioned that “The blockchain actually gives us a lot of tools to be able to identify people”. She added that “I actually want them to keep using them”.

Law Enforcement’s Best Friend?

The blockchain is far designed to offer anonymity. In fact, during a US House public meeting on digital assets in mid-July, Scott Kupor suggested that “Bitcoin is law enforcement’s best friend”. This is pertaining to the ability of modern crypto forensics to track down illicit transactions that are found on the blockchain.

It is expected that criminals are most likely going to resort to cryptocurrencies in the future despite changing regulations. It is easier to move funds using cryptocurrencies not to mention it doesn’t involve a central bank or any governing body. However, these findings by the DEA only shows that people who are interested in cryptos are not merely criminals but people who are looking to invest in cryptocurrencies.

John Jayme

John is a crypto investor, enthusiast and copywriter. He is in charge of daily news and other emerging trends in blockchain technology.