While cryptocurrency offers numerous advantages , its susceptibility to rapid and extreme price fluctuations poses a significant risk for investors.
The risk is inevitable and unstable for the investors, as volatility makes them riskier investments compared to traditional assets.
For those who are looking for stability, cryptocurrency might not be the right choice. Speaking of which, in the long term, it doesn't look like cryptocurrency will take the place of traditional money.
On the other hand, security is like a fire with its vulnerabilities.
Cryptocurrency exchanges and wallets can be vulnerable to hacking, potentially leading to theft.
The features that make cryptocurrency appealing just as an investment—decentralisation as a dark side, anonymity, and lack of banking oversight—also make it attractive to hackers.
An increase in financial crime cases, such as money laundering, tax fraud, tax evasion, financing terrorism through deceitful investments, monetising ransomware, or purchasing illicit goods, can lead to the increased popularity and shielding advantages of cryptocurrencies.
As cryptocurrencies are accepted by powerful countries and can flow freely between nations, a number of well-known terrorist organisations have attempted to finance their operations with them.
Due to the peer-to-peer nature of cross-border transactions and the absence of identity requirements, cryptocurrencies pose a significant risk of tax evasion, which creates an 'tomorrow's tax haven' for tax criminals.
𝐇𝐨𝐰 𝐂𝐫𝐢𝐦𝐢𝐧𝐚𝐥𝐬 𝐔𝐬𝐞 𝐂𝐫𝐲𝐩𝐭𝐨𝐜𝐮𝐫𝐫𝐞𝐧𝐜𝐲:
-𝐓𝐡𝐞 𝐩𝐫𝐨𝐦𝐢𝐬𝐞 𝐨𝐟 𝐚𝐧𝐨𝐧𝐲𝐦𝐢𝐭𝐲 𝐢𝐧 𝐜𝐫𝐲𝐩𝐭𝐨𝐜𝐮𝐫𝐫𝐞𝐧𝐜𝐲
-𝐖𝐢𝐭𝐡𝐨𝐮𝐭 𝐬𝐭𝐫𝐢𝐧𝐠𝐬 𝐚𝐭𝐭𝐚𝐜𝐡𝐞𝐝 𝐭𝐨 𝐮𝐬𝐢𝐧𝐠 𝐚 𝐜𝐫𝐲𝐩𝐭𝐨𝐜𝐮𝐫𝐫𝐞𝐧𝐜𝐲 𝐭𝐫𝐚𝐧𝐬𝐚𝐜𝐭𝐢𝐨𝐧
-𝐅𝐚𝐬𝐭 𝐚𝐧𝐝 𝐞𝐚𝐬𝐲 𝐜𝐫𝐨𝐬𝐬-𝐛𝐨𝐫𝐝𝐞𝐫 𝐭𝐫𝐚𝐧𝐬𝐟𝐞𝐫𝐬 𝐟𝐚𝐜𝐢𝐥𝐢𝐭𝐚𝐭𝐞 𝐢𝐥𝐥𝐞𝐠𝐚𝐥 𝐚𝐜𝐭𝐢𝐯𝐢𝐭𝐢𝐞𝐬.
-𝐂𝐫𝐲𝐩𝐭𝐨𝐜𝐮𝐫𝐫𝐞𝐧𝐜𝐢𝐞𝐬 𝐜𝐚𝐧 𝐛𝐞 𝐞𝐚𝐬𝐢𝐥𝐲 𝐬𝐭𝐨𝐫𝐞𝐝 𝐚𝐧𝐝 𝐭𝐫𝐚𝐧𝐬𝐟𝐞𝐫𝐫𝐞𝐝.
The criminals use various methods to convert cryptocurrencies to fiat currency:
*𝐂𝐫𝐲𝐩𝐭𝐨𝐜𝐮𝐫𝐫𝐞𝐧𝐜𝐲 𝐞𝐱𝐜𝐡𝐚𝐧𝐠𝐞 𝐩𝐥𝐚𝐭𝐟𝐨𝐫𝐦
*𝐂𝐫𝐲𝐩𝐭𝐨𝐜𝐮𝐫𝐫𝐞𝐧𝐜𝐲 𝐭𝐫𝐚𝐝𝐞𝐫𝐬
*𝐂𝐫𝐲𝐩𝐭𝐨𝐜𝐮𝐫𝐫𝐞𝐧𝐜𝐲 𝐜𝐚𝐫𝐝𝐬
*𝐁𝐢𝐭𝐜𝐨𝐢𝐧 𝐀𝐓𝐌𝐬
*𝐎𝐧𝐥𝐢𝐧𝐞 𝐜𝐚𝐬𝐢𝐧𝐨𝐬
𝐑𝐞𝐚𝐥-𝐖𝐨𝐫𝐥𝐝 𝐄𝐱𝐚𝐦𝐩𝐥𝐞:
Late 2023: Binance and its founder, Changpeng Zhao (aka;CZ), agreed to plead guilty to money laundering charges in a US settlement. CZ resigned, and Binance was fined $4.3 billion.