The latest ‘use case’ for Bitcoin on the darknet highlights familiar worries.

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As if weaponry, bioweapons, pornography, and illegal narcotics weren’t enough, darknet market shops have begun to offer stolen Covid-19 vaccinations and counterfeit immunisation certificates in their catalogues. Customers who choose these unlawful immunisation techniques are also vulnerable to frauds, according to a recent Coinform investigation.

Vendors are selling Covid-19 vaccinations on the darknet market store ‘COVID-19 vaccine,’ according to the same. They are apparently utilising BTC payment acceptance addresses that are linked to other addresses used by different darknet businesses, including mixers, stolen/cloned credit card sellers, drug dealers, and frauds, especially Bitcoin doublers. Coinform also identified these individuals as belonging to the same organisation or organisation that was also soliciting scams.

This is not the first time that scammers have used the health industry to monetize using cryptocurrency during the epidemic. Late last year, dozens of hospitals in the U.S. were attacked by ransomware and their digital systems were locked up. The only path to recovery was paying up in the form of cryptocurrencies.

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This is only one example of a long range of illegal actions utilising cryptocurrencies throughout the world, all of which are harming the asset class’s uptake and consumer sentiment. As a result, it is not surprising that numerous significant financial sector companies have spoken out against its usage and advocated for restrictions on the entire ecosystem.

Earlier this year, US Treasury Secretary Janet Yellen described cryptocurrency as a “special concern” in terms of terrorist funding.

“I think many [cryptocurrencies] are used, at least in a transactions sense, mainly for illicit financing and I think we really need to examine ways in which we can curtail their use and make sure that anti-money laundering doesn’t occur through those channels.”

Moreover, European Central Bank President Christine Lagarde had this to say about Bitcoin,

“It is a highly speculative asset, which has conducted some funny business and some interesting and totally reprehensible money laundering activity.”

However, the numbers paint a completely different story. According to a report by Chainanalysis, cryptocurrency-related crime fell significantly in 2020. Illicit activities made up just 0.34% of all cryptocurrency transaction volume last year, down from roughly 2% a year earlier.

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However, the study did point out that, while scams had decreased by 72%, ransomware assaults were the only activity that had increased. The darknet market as a whole has seen a 42 percent drop in usage over the last year.

Crypto-crimes also make up a very small percentage of overall illicit activities carried out. According to the UN, between 2% and 5% of global GDP ($1.6 to $4 trillion) annually is connected with money laundering and illicit activities.

Critics have also complained that exchanges that do not require KYC and other such regulatory terms harbor these activities. While that may be true, this report by RAND pointed out that,

“Despite the perceived attractiveness of cryptocurrencies for money laundering purposes . . . an estimated 99 percent of cryptocurrency transactions are performed through centralized exchanges, which can be subject to AML/CFT regulation similar to traditional banks or exchanges.”

The same study also emphasised the growing use of Zcash for darknet transactions. Zcash, along with other privacy cryptocurrencies such as Monero and Dash, are the most sought-after currencies used by criminals owing to the anonymity of the sender’s or receiver’s address or transaction amount.

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