Bitcoin is bad for crime

This week the U.S. justice department announced having seized 64 bitcoins paid to the hackers that attacked Colonial Pipeline in May. The attackers disrupted fuel supplies to the US Southeast by stealing one single password, showing how vulnerable the company security was. Yet, the media mostly preferred to concentrate on the fact that the ransom was demanded in BTC, casually confusing cause and consequence.

As a matter of fact, it were Bitcoin’s inherent properties that allowed the FBI to seize the ransom. Bitcoin is a public ledger and a simple blockchain explorer can show every transaction that has ever happened on it. More advanced blockchain analytics can track the movements of a particular amount, and high-end IT techniques can even get more data on an address. It’s much more difficult with cash or complex bank frauds, which are both obscure systems.

Crime and ransomware existed long before Bitcoin, and they will continue existing as long as there are criminals. However, choosing Bitcoin for illicit activity appears to be a bad idea, and the occurrence of crypto sent and received by illicit entities is down more than 50% between 2019 and 2020. In 2020, the illicit share of all cryptocurrency activity fell to just 0.34% of all transaction value, or $10 Bn (data by Chainalysis). Just about time to reverse the erroneous narrative of “crypto is a tool for criminals” and start tackling real issues.