28.11.2021

Former head of the CIA: bitcoin is practically NOT used in criminal activities

Former Acting Director of the US Central Intelligence Agency Michael Morell, provided an independent analysis of the challenges of the cryptocurrency industry in collaboration with the new lobbying organization Crypto Council for Innovation.

In the course of the study, Morell found out that public perceptions about the use of bitcoin in illegal financial activity are significantly distorted, and analytical tools at the blockchain level make it possible to effectively counter the accompanying threats.

A veteran of the special services with 33 years of experience admitted that he did not expect to come to such conclusions when he began this work. As Morell himself noted in a conversation with Forbes, he proceeded from the assumption that US Treasury Secretary Janet Yellen and European Central Bank President Christine Lagarde are among the most informed figures on the planet and are based on proven facts. Yellen, in particular, has recently repeatedly expressed concerns about the use of bitcoin in illegal activities.

Morell, however, made sure that the situation is “just the opposite, and bitcoin and cryptocurrencies are not overflowing with illegal activity.”

“In reality, the levels of illegal activity in the Bitcoin ecosystem may be lower than in the traditional banking system,” added Morell.

According to the analytical platform Chainalysis, the share of illegal cryptocurrency transactions in the total volume is negligible (less than 1%) and continues to fall. For comparison, Morell cites data that the volume of illegal transactions carried out through traditional intermediaries is estimated at 2-4% of world GDP.

Separately, he noted that he was struck by the ability of analytical companies such as Chainalysis, CipherTrace and Elliptic to detect criminals hiding behind cryptocurrencies. At the same time, the former acting The CIA director stressed that cryptocurrencies, like any other technology, require control from a national security standpoint. In particular, according to his observations, criminals are increasingly using cryptocurrencies with increased anonymity, such as Monero, to hide the details of their operations.

Like several other experts, Morell believes that, given the relatively low levels of criminal activity, it is important to support rather than restrict financial innovation, especially in light of the confrontation on this front with China.

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