09.12.2021

The former head of the CIA explains why criminals are inconvenient to use Bitcoin

According to former CIA chief Michael Morell, the technology behind Bitcoin is “the best surveillance tool” that governments can use to their advantage.

Morell, formerly acting director of the Central Intelligence Agency, outlined his thoughts in a report titled Analyzing the Use of Bitcoin in Illicit Finance. In his opinion, “blockchain technology is a powerful but underutilized forensic tool for governments.” Allegedly, with the help of blockchain, it will be much easier for government organizations to find and send criminals to jail. Let’s talk about the situation in more detail.

Recall that Bitcoin and other cryptocurrencies are still perceived by some people as the main tool for scammers and criminals who allegedly use coins to buy prohibited goods and pay for dubious services. This reputation was influenced by the Silk Road darknet market, where BTC was indeed used for illegal transactions.

The store has been operating since 2011, and it sold both drugs and fake documents. As a result, the creator of the platform was arrested – he received a double life sentence and 40 years in prison in addition.

Since then, many people do not trust cryptocurrencies and prefer not to get involved with them, since they consider them an illegal tool, the main users of which are allegedly criminals. However, in reality this is not the case. A former CIA representative spoke in detail about the inconvenience of using blockchain by scammers.

Is Bitcoin Really Anonymous

The report, co-authored with Josh Kirchner and Thomas Schönberger, lists some features of Bitcoin that can be interpreted as positive, although they are often attributed to disadvantages. The main one is the use of BTC by criminals. This very fact makes them very vulnerable to surveillance, experts say. Here is their line in which the position is announced.

Simply put, blockchain analysis is a highly effective tool for fighting crime and collecting the right information.

This means that analysts reject the well-known position of bankers and officials that cryptocurrencies are allegedly used exclusively to finance criminal activities. Indeed, if dollars or cash of other currencies leave no traces at all, then any transaction in the blockchain remains forever. In addition, since the blockchain is transparent, and anyone can study its contents, it is simply wrong to criticize coins in this regard.

The technology behind Bitcoin is to record all transactions in a public, decentralized and immutable ledger. Thus, tracking illegal transfers in BTC is much easier than chasing the cash flows of criminals, according to Decrypt. If they manage to convert funds into cash, the government has to spend enormous resources on surveillance.

If all criminals used blockchain, we could destroy illegal financial activity.

That is, the former CIA officer considers blockchain as an unsuitable environment for the activity of criminals. And this has a good effect on the reputation of cryptocurrencies, which many ignorant people still consider exclusively a tool for speculation and the acquisition of prohibited substances.

The latter quote contradicts the claims of the US and European authorities, as well as recent reports from analytical firms such as Chainalysis, a platform that works closely with law enforcement agencies around the world. Recall that in December 2020, Chainalysis employees said that now the crypt is used more actively on the darknet than ever.

In addition, in February this year, US Treasury Secretary Janet Yellen expressed concern that Bitcoin “is often used to fund illegal activities.” European Central Bank President Christine Lagarde said in January that BTC has been used primarily for money laundering in the past. But the investigation of the former CIA director showed that the myths about the use of large amounts of bitcoins by fraudsters are not supported by the facts.

On the other hand, anonymous coins like Monero are much more likely to appear in illegal transactions. The report also notes that former Assistant Secretary of the Treasury for Combating the Financing of Terrorism and Financial Crimes, Daniel Glaser, this year announced the need to create “an appropriate infrastructure to control cryptocurrency transactions.” This measure, according to Glazer, is mandatory in the emergence of the digital economy.

We believe that Michael Morell’s position is correct, and the blockchain is really inconvenient for scammers who risk revealing their identity and telling everyone about their previous transactions. Tesla, MicroStrategy and Square are now openly investing in Bitcoin, making it an excellent tool for preserving and transferring value. And it’s time to get rid of the negative reputation of cryptocurrencies – in 2021 this is especially important.

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