Everyone involved in the world of Bitcoin and cryptocurrency will readily agree there are plenty of challenges ahead. While most of the opposition comes from external forces, the currencies themselves are not exactly perfect either. While most people won’t like to admit it, Bitcoin, Ethereum, and most other currencies are not exempt from criminal activity. The FBI certainly has its hands full in this regard; that much is certain.
Digital Currencies and the FBI
Criminal activity is often associated with Bitcoin and many other cryptocurrencies these days. While not all of these claims are entirely true, it is evident there are a lot of incidents which do require a second glance. This is a bit of a problem for the FBI right now, as the law enforcement agency is currently attributing nearly 75% of its time to money laundering cases involving digital currencies.
That in itself is a pretty problematic development, although it is not entirely surprising. Moreover, this begs the question as to how many money laundering cases the FBI is actually investigating right now. Digital currency is still a very niche market at best and doesn’t even come close to regular money laundering cases involving traditional payment methods.
As one has come to expect, most of these cases involve ransomware or other types of malware demanding Bitcoin payments. It is certainly true we are seeing more ransomware attacks compared to five years ago, but that doesn’t necessarily mean more people are paying ransoms in Bitcoin or other cryptocurrencies. In fact, the FBI has warned Americans multiple times to never meet demands made by malicious software developers.
What is rather problematic, however, is the mounting number of exchanges suffering hacks or other thefts. Since 2011, nearly 1 million BTC has been stolen in the process, according to the New York Times. That is a pretty spectacular number, considering it represents around 6% of all bitcoins currently in circulation. Then again, the majority of these coins have since been sold on the market and bought up by others; thus they are not “lost” by any means.
Additionally, the FBI is also somewhat concerned over how so few cryptocurrency exchanges successfully perform basic security precautions these days. Basic security checks and Know Your Customer (KYC) procedures need to be improved, even though most major exchanges have been doing so for quite some time now. Importantly, none of this has caused interest in Bitcoin to dwindle by any means. With more interest in cryptocurrency come more problems until people smarten up; that much is certain.
While all of these factors paint a rather negative picture, it remains to be seen how things will play out. Cryptocurrency is definitely here to stay and no one should expect otherwise. That doesn’t mean we don’t need improvements on the part of service providers and currency developers, though. Luckily, we see constant improvements being worked on, even though they may sometimes take a bit longer to come to market than originally expected.