World Regulators Worried About Cryptocurrencies Used In Illegal Activities
A recent study compiled with government authorities and regulators concluded that they still view the cryptocurrency industry as a significant risk source. Those establishments raised concerns regarding the field’s self-regulation and the number of illegal activities funded by digital assets.
Unsurprising: Regulators Worried About Crypto Regulations
The UK’s oldest defense and security think tank, the Royal United Service Institute (RUSI), published the study dubbed Cryptocurrency Risk & Compliance Survey. Aimed to shed some light on the general perception of regulations within the digital asset industry, the research asked government watchdogs, cryptocurrency representatives, and traditional financial institutions about their outtake.
Respondents from all sectors agreed that the self-regulating system within the cryptocurrency field is not sufficient. Consequently, they asserted that government bodies and international organizations like the Financial Action Task Force (FATF) should intervene to establish more transparent and precise legislative frameworks.
Should that indeed occur, the participants in the survey believe that more institutional investors would be allured to join. Additionally, comprehensive regulations could enhance cryptocurrencies’ role in day-to-day payments.
Most respondents (69%) answered that cryptocurrencies are currently too volatile to replace cash. They also brought out possible risks associated with dealing with digital assets. Governments and traditional financial entities went even further by classifying them as a “significant source of risk.”
Crypto In Illegal Endeavors
Most participants, even from within the cryptocurrency industry, outlined that digital assets suffer from being linked with substantial usage in illicit activities.
“Respondents all expressed concern regarding the use of cryptocurrency by various illicit actors, ranging from terrorist groups to sanctioned actors and human traffickers. While cryptocurrency use by criminals only accounts for around 1% of all transactions, it remains an attractive venue for those avoiding the traditional financial system.”
Indeed, as CryptoPotato reported recently, the US Justice Department seized over 300 cryptocurrency accounts operated by three notorious terrorist organizations – ISIS, Hamas, and al-Qaeda. French authorities also arrested 29 people allegedly funding jihadists and al-Qaeda members through cryptocurrency vouchers.
Nevertheless, well-regulated establishments such as banking institutions have been involved in lots of illegal activities as well. Recently surfaced FinCEN documents revealed that giant banks like HSBC, Standard Chartered, Bank of America, and JPMorgan Chase, have transmitted trillions of dollars in suspicious transactions from Ponzi Schemes and terrorist organizations in the past few decades.