Introduction
Ever since the creation of Bitcoin in 2009 which is widely known as the first cryptocurrency ever created, the number of crimes committed using this means of money transfer has become almost uncountable. According to existing records, more than $2 trillion has been lost to fraudsters since the introduction of Bitcoin thirteen years ago.
The decentralized nature of Bitcoin (BTC) and every other cryptocurrency traded today has so much favored the activities of fraudsters making it possible to defraud investors without any trace for tracking the perpetrators.
This work has therefore examined in detail the different ways in which cryptocurrency has promoted crime across the globe since its creation.
Basic foundation of cryptocurrency
Cryptocurrency was created to serve as a decentralized means of payment. The first cryptocurrency – Bitcoin was created as a revolt against the traditional means of wealth storage using the banks and controlled by the government. People became displeased with the centralized means and desired something different. This was how Bitcoin was created to serve this purpose.
Every other cryptocurrency created after Bitcoin continued to maintain this standard. Cryptocurrency being decentralized has made it difficult to trace the identity of the dealers. Many fraudsters have taken advantage of this backdrop today. The results have been an increased crime rate.
We have therefore discussed these many ways through which cryptocurrency has led to an increased crime rate in the paragraphs below.
Does cryptocurrency lead to an increased crime rate today?
Cryptocurrency has led to a high increase in the crime rate today. The number of crypto frauds committed today is simply unimaginable. In 2020 for instance, it was reported that the losses from crypto-related crimes climbed to 79% of the total crimes committed in 2020.
Both individual crypto investors, crypto companies, and exchanges have been victims of this fraud. Hence it has been estimated that more than 2 trillion has been stolen from crypto owners. The most popular crypto fraud in history is the hack of the Japanese crypto exchange Coinheck in 2018, where over $530 million worth of coins were stolen from the exchange in less than an hour.
Another significant crypto fraud is the Poly network attack where hackers stole roughly $600 million from the Defi platform. The only difference here is that the hackers later returned half of the funds stolen when the platform kept appealing publicly to them to do so. Thereby reducing the unrecovered funds to about $300 million.
Many individual crypto traders have suffered some form of attacks on their digital assets in the past too. It has been estimated that more than 15% of the crypto traders in every country had in the past been victims of crypto-fraud causing them to lose their assets with no hope of recovering them again.
What are the most common crimes perpetrated through Cryptocurrency
- Money laundering: A lot of funds obtained via stealing and looting of public funds are usually covered up by pushing them into cryptocurrency. This makes it difficult to trace the origin of such funds.
- Terrorists’ activities: One major criticism given to cryptocurrency today is that it is often used to sponsor terrorists’ activities. Thus, many secret organizations sponsoring terrorists used it as a convenient means for sending money to these terrorists to carry on with their activities.
- Cyber fraud: The amount of internet fraud committed today using cryptocurrency is unimaginable. This includes attacking investors’ wallets, phishing, hacking, etc.
Can Cryptocurrency ever exist without any tendency to commit crime?
The Centralized nature of cryptocurrency has made it very difficult to control the crime rate committed through this means.
Angela Spearman is a journalist at EzineMark who enjoys writing about the latest trending technology and business news.
