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Bitcoin's money laundering claims largely overblown says Quebec chief scientist

Bitcoin money laundering claims largely overblown says Quebec chief scientist

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Bitcoin has been touted as the go-to for criminals in their illegal activities, such as money laundering, but Quebec Chief Scientist Rémi Quirion says that claim is blown out of proportion.

Earlier this year, International Monetary Fund chief Christine Lagarde said at the World Government Summit in Dubai that, “there is probably quite a bit of dark activity [in cryptocurrencies.”

Lagarde double-down on that comment and wrote a post on the IMF blog where she addresses the dark side of the crypto world.

In a post on the Agence Science-Presse and Fonds de Recherche du Quebec — a government research fund — website, Quirion argues that the facts do not support Lagarde and others’ claims that there’s a high-use for Bitcoin in illegal activities.

One of the points that Quirion makes is that Bitcoin isn’t as anonymous as it would have you believe.

“The anonymity of bitcoin is a myth, it is no more transparent as money because you have to go through a platform where you have to give personal information,” the post reads. “At the limit, if the name is not his, we always know the address of the transmitter and that of the receiver.”

Quirion makes the claim that because bitcoin runs on blockchain technology, every transaction is transparent and public. Jonathan Hamel, an associate researcher at the Montreal Economic Institute, and who was interviewed for the post, support these claims. Hamel says an illegal transaction would be easy to link to its user.

Furthermore, Hamel points that there are firms that are offering such services at present time, one of them being Chainanalysis.

The driving point and perhaps the cherry on top of Quirion’s argument is a January 2018 study done by the Center for Sanctions and Illicit Finance of the Defense of Democracies Foundation. The study looked at and analyzed bitcoin transactions between 2013 and 2016 and found that “only 0.61 percent of the money entering conversion services during the four years analyzed were verifiably from illicit sources, with the highest proportion — 1.07 percent — seen in 2013.”

While Quirion argues that Bitcoin isn’t used widely for illegal activities as others have claimed, he does state that the cryptocurrency is not above the law. He argues that bitcoin isn’t without its own set of problems.

One of those problems is scams within the cryptocurrency community, which range from ICO scams to pyramid schemes, to name a few. Scams may still be an ongoing issue but the cryptocurrency community can take solace in the fact that Quirion’s comments take away some heat from the claims that bitcoin is a potential haven for illegal activity.

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