How bitcoin is used for illicit activities and why.

in crypto •  5 months ago


It is of no doubt that Bitcoin has revolutionized the way we are doing transactions in our daily lives, let it be international transactions or domestic. All in general crypto has changed or in some sense made our lives little better and less miserable than before.

Let it be the trading or money transactions. Bitcoin and other crypto currencies have provided us with better and easier ways of money transactions in our lives, we no longer need to do the hassle for bank accounts number and other details only the bitcoin address is enough, its true that PayPal and other money wallets also made it easy but giving out your PayPal Email is bit more riskier than giving out the secure 256 bit bitcoin address . The crypto world now has successfully reached to its infinite new heights that, now some crypto exchanges started to provide 'Bitcoin debit cards' or crypto debit cards in general. Now anyone can register for those bitcoin cards and withdraw their money in the local ATM's and shop offline on POS machines. While these services have made our lives efficient. Some of the vendors around the world now have started to accept Bitcoin as an payment. While in Canada the stores and local supermarkets were reported to have 'dedicated' Bitcoin ATM's, in the same way this made the Illicit use of Bitcoin or cryptocurrency for fraudulent transactions very easy.

Unfortunately every good things have their bad side. Bitcoin is one of them. Its necessary to understand the bad side because it can help us know why the government is keen bent on regulating and banning these crypto currencies.


Now since Bitcoin gained its popularity with its high volatility in the prices, it attracted crime syndicates in the same flow. Every good thing has their certain drawbacks and so does Bitcoin. Bitcoin has made the lives of people easier who are involved in hacking, money laundering, obtaining illicit goods from the fraudulent transactions. Ponzi schemes are one of the favorite techniques of these scammers to acquire money (Bitcoin), Ponzi scheme is a investing scheme, where one promises of high returns with low risk to the investors. They promise and guarantee 100% that you will earn money and make a huge profit with minimal to no risk. Which we all know is not possible in the real world.


They are also mainly used in Illegal Drug trade and arms and ammunition trade, where the international crime syndicates use them. The laundering of Fiat currency (USD,EUR,GBP) is hard, because they are controlled and regulated by the Central government of the country. So these crime units prefer the Bitcoin.
Bitcoin has gained the popularity by its unique feature of being anonymous whenever doing the transactions, and this is a golden loophole for those involved in unethical activities. While the bitcoin is based on Blockchain network and all of its transactions are encrypted, its near to impossible for the government to track the transactions. While bitcoin and other crypto currencies being decentralized the government does not play any role in this trade. Bitcoin and other crypto currencies have also gained the attraction due to its spiking rates, while in the December 2017 it reached its maximum $19,783 almost to $20k, while its price being near to $2000 in may 2017. The volatility which any other instruments or asset cannot provide. This attracts a lot of unwanted attention to it.

While Bitcoin being very liquid cryptocurrency, one can easily convert it to cash (fiat currency).

Recently Government of India had announced and ordered the banks to cut ties with any sort of transfer or withdrawal to these crypto exchanges. The govt had given a 3 months of time to the banks which ended on July 3 2018. Now futher hearing will finalize the decision

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