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Debunking Crypto Myths with Binance! The myth that crypto is mainly used by criminals – Sponsored Bitcoin News
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The world of cryptocurrencies and blockchain has exploded in recent years. However, a lack of understanding surrounding this technology has led to a number of false beliefs and misconceptions, causing many to approach digital assets with unwarranted suspicion and uncertainty. To combat this, Binance has made it part of its mission to provide accessible Web3 education to all and work to improve crypto understanding.
Through these efforts, Binance aims to debunk common misconceptions and promote greater crypto literacy. Their goal is to clear up confusion and help improve the public’s understanding of crypto. It is crucial to have a thorough understanding of the basics and critical thinking as this will help people better understand and ultimately use cryptocurrency. Time to debunk some crypto myths!
Myth: Crypto is only used by criminals
The use of crypto for illegal activities has been a topic since the early days of this new form of digital currency. The public’s perception of cryptocurrencies as inherently linked to criminal activities (such as money laundering, drug trafficking, and cybercrime) can largely be traced back to the early media coverage of cryptocurrencies—specifically, the infamous Silk Road market.
Silk Road was an online black market that operated on the dark web from 2011 to 2013, offering a platform for the anonymous buying and selling of illegal goods and services using Bitcoin. The marketplace was notorious for its involvement in drug trafficking, and the association between crypto and Silk Road’s illegal activities contributed to the negative reputation of cryptocurrencies in the mainstream media.
The perceived anonymity and decentralization of cryptos has given rise to concerns that they facilitate criminal activity. Many media outlets often choose to focus on high-profile cases of crypto-related crimes, promoting the idea that digital assets are mostly used by those who wish to engage in illegal activities while avoiding detection.
Reality: Data shows that crypto is mainly used by ordinary people
The reality is that crypto is primarily used by ordinary people and exists as a legitimate tool for a variety of everyday transactions. Binance alone has more than 120 million registered users. As with any emerging (or existing) technology, criminals will always use it for malicious purposes. That said, illegal activity accounted for only ~0.15% of crypto transactions in 2021 – down from 0.62% in 2020 despite the industry’s exponential growth – and money laundering accounted for 0.05%.
And don’t just take Binance’s word for it. This is data from Chain analysis, an independent blockchain analytics company. Chain analysis data is often used by government agencies, including the United States Federal Bureau of Investigation (FBI), Drug Enforcement Agency (DEA), and Internal Revenue Service Criminal Investigation (IRS CI), as well as the United Kingdom’s National Crime Agency (NCA), to investigate and combat crypto-related crimes.
In the traditional fiat space, close to $800 billion to $2 trillion is laundered each year, which is around 2-5% of global GDP – as reported by the United Nations Office on Drugs and Crime (UNODC). Compare that to crypto and the amount is a minuscule 0.03% of that. Criminals don’t like crypto because the fact that the transactions are publicly and permanently recorded actually makes it possible for investigators. Unlike traditional financial investigations, the transparent nature of crypto makes it easier to identify bad actors.
Criminals don’t like transparency
Blockchain is inherently transparent. All transaction data is recorded in a public ledger. Anyone can examine the entire codebase at any time. Using crypto for nefarious purposes leaves an excellent paper trail for prosecutors to lock in a conviction.
Europol and the Basel Institute on Governance have stated that crypto is the key to tackling organized crime. You simply cannot move large amounts of money around without being noticed. In fact, crypto exchanges continue to be one of the primary allies in the fight against criminal activity. For example, in 2021 Binance helped take down one cybercriminal ring laundering $500 million in ransomware attacks.
Law enforcement agencies remain at the forefront of the collective fight against crime. Acquiring the necessary resources, skills and tools, as well as working closely with crypto companies, has been a top priority for agencies globally. In the US, the Treasury Department has called for more funding to track and fight cryptocrime, and the DoJ and FBI have set up dedicated national cryptocurrency enforcement task forces.
In addition, the Financial Action Task Force (FATF), the global anti-money laundering and terrorist financing watchdog, has issued standards for virtual assets that mirror those for fiat. But implementation has lagged: out of 200 countries committed to FATF standards, only 19 have implemented it for virtual assets (as of March 2023).
Final thoughts
The idea that crypto is primarily a hotbed of illegal activity is grossly exaggerated. In fact, the vast majority of crypto transactions and investments are legitimate and focused on real-world use cases with the potential to transform the global economy. The rise of blockchain technology has opened up new opportunities for financial innovation, and cryptocurrencies are just one aspect of this rapidly evolving landscape.
From decentralized finance (DeFi) to non-fungible tokens (NFTs), the potential uses for crypto and blockchain technology are vast and varied. The industry has only scratched the surface of what is possible. While there are certainly risks and challenges, it is important to approach this exciting new technology with an open mind and a willingness to learn and adapt to fully realize its potential for positive impact. There should also be appropriate safeguards in place to try to weed out bad actors – something no financial services ecosystem is immune to.
Fact: Crypto is primarily used by ordinary people. Independent data shows that only 0.15% of crypto transactions involve illegal activity. If you are a criminal, you are more likely to be caught with crypto than if you use cash or the traditional financial system.
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