Sorry Janet and Christine, Criminals Still Prefer the U.S. Dollar and Euro to Bitcoin

The U.S. dollar is the favorite currency of criminals. Image: AFP

January 20, 2021, is a special day for Joe Biden. It is indeed the day he will become the 46th president in the history of the United States. Everyone hopes that the departure of Donald Trump from the White House will lead to a more peaceful presidency in the coming months.

In recent weeks, appointments to key positions in the Joe Biden administration have been announced. Among the important positions is the one that Gary Gensler is expected to hold as head of the SEC (Securities and Exchange Commission). Former CFTC (Commodity Futures Trading Commission) financial regulator, Gary Gensler was reportedly chosen to provide tougher regulation of Wall Street.

For the Bitcoiners, the appointment of Gary Gensler seems to be a good thing. Indeed, he is known to be an advocate for Bitcoin who praised the remarkable invention of Satoshi Nakamoto. For Gary Gensler, Satoshi Nakamoto “solved the payments riddle, how to securely move value peer-2-peer on the internet while avoiding double-spending”.

If some people saw Gary Gensler’s appointment as a positive signal, they must have been calmed in their ardor when they saw that Janet Yellen should take over the position of Secretary of the Treasury of the United States. I’m still speaking in the conditional because the Senate will have to confirm Janet Yellen in this position.

Future Secretary of the Treasury, Janet Yellen already falsely attacks Bitcoin

Anyway, Janet Yellen has already announced the color on January 19, 2021. In a speech, Janet Yellen explained her intentions for the coming months while again attacking Bitcoin and cryptocurrencies:

“I think many cryptocurrencies are used, at least in a transaction sense, mainly for illicit financing and I think we really need to examine ways in which we can curtail their use and make sure that anti-money laundering doesn’t occur through those channels.”

Without giving any real proof of her allegations, Janet Yellen attacked Bitcoin and cryptocurrencies using the same angle of attack that comes back and comes back again. However, it has been proven in the past that using the U.S. dollar for illegal activities was easier than using Bitcoin.

But Janet Yellen doesn’t care about that. She prefers to attack Bitcoin with the old clichés that still hold sway in the political arena. In this, she joins Christine Lagarde, the president of the European Central Bank, who also attacked Bitcoin head-on last week at the Reuters Next conference:

“Bitcoin is a highly speculative asset, which has conducted some funny business and some interesting and totally reprehensible money laundering activity.” Christine Lagarde had already attacked Bitcoin the week before

This attack by Christine Lagarde was primarily intended to serve the interests of the president of the European Central Bank. Indeed, during the same interview, Christine Lagarde had promoted the digital euro on which her institution is working to make available by 2025 at the latest.

Christine Lagarde advises against Bitcoin, which is dangerous according to her, but warmly recommends this digital euro synonymous with progress. This should be enough to convince you of the necessity for you to buy Bitcoin to protect your future in terms of money and privacy.

When the subject of the digital dollar comes back to the forefront in the United States, Janet Yellen is likely to come to its defense and say that it would be a huge step forward for citizens. Again, this should alert you that it’s time to switch to the Bitcoin world.

The 2021 Crypto Crime Report restores the truth about the use of Bitcoin for illicit activities

Every year, the analysis company Chainalysis publishes its “Crypto Crime Report”. The 2021 edition has just been published. It is an opportunity to verify with facts whether Bitcoin and other cryptocurrencies are tools that criminals use massively for their illicit activities.

The first thing that emerges from the 2021 Chainalysis report is that the use of Bitcoin and other cryptocurrencies for criminal activities has been halved in 2020 compared to 2019:

Total cryptocurrency value sent and received by criminal entities vs. Criminal share of all cryptocurrency activity

In 2019, criminal activity accounted for 2.1% of all cryptocurrency transactions for a total of $21.4 billion. By 2020, the total falls to $10 billion, a decrease of -53%. Criminal activity then represented only 0.34% of all transactions for the year.

Looking at the figures, we realize that the assertions of Janet Yellen and Christine Lagarde are totally false. Bitcoin is not only used for illegal activities. It is quite the opposite. The vast majority of transactions on the Bitcoin network are used for completely normal activities.

The Crypto Crime Report 2021 also gives details on the distribution of illegal activities detected in 2020 in the cryptocurrency world:

Total Funds Received by Illicit Entities, Annual

Terrorist financing and the darknet clearly account for the bulk of the 0.34% of transactions for illegal activities detected in 2020. While ransomware still represents only a small part of these illegal activities in 2020, there is a sharp increase in this category between 2019 and 2020:

Cryptocurrency-based crime categories by the percentage increase in funds received, 2018–2020

As the price of Bitcoin rises, more and more ill-intentioned people will try to extort Bitcoin. This is not illogical. It simply shows that Bitcoin is really considered money.

Money used for illegal activities on the Bitcoin network is negligible compared to the trillions of U.S. dollars laundered each year via the fiat system

The 10 billion dollars transferred via the Bitcoin network by criminals in 2020 should be put into perspective with the amount of U.S. dollars used for illegal activities. The first thing to remember is that the current monetary and financial system is so opaque that it is difficult to have precise figures, unlike the Bitcoin network where everything is transparent and can be monitored.

Thus, the amount I am going to reveal here does not take into account all the money laundered by private banks that have not yet been unmasked for example.

According to the United Nations Office on Drugs and Crime, suspicious transactions in the current system amount to at least $2 trillion in 2019. This figure seems to have been declining for a few years but it is still huge. The efforts undertaken by the various countries to strengthen controls since the banking and financial crisis of 2008 have led to an improvement.

Nevertheless, the multi-billion dollar fines imposed have not really cooled the ardor of money launderers. They were simply slowed down for a few months before they started up again as before. In 2019, the global money supply in circulation was estimated to be in the order of $90 trillion.

For every dollar used for illegal activities on the Bitcoin network, more than $200 is laundered in U.S. dollar

Since it is difficult to estimate precisely the global money supply in circulation since it is constantly increasing, it is considered that it was around $100T at the end of 2020. Roughly speaking, it can therefore be considered that at least 2% of the global money supply is used for money laundering every year.

The figure is probably even higher, but 2% is already a very high figure. The worst thing is that this estimate only takes into account money laundering without taking into account other illicit activities such as the sale of arms or drugs for example. The percentage of the global money supply in circulation used for illicit purposes must therefore be much higher than 2%.

By sticking to these estimates, this means that for every $1 used to launder money each year, less than $0.005 is used for illicit activities in the cryptocurrency world. I have not even included here the money used in euros as well as money used for the sale of weapons and other illegal activities.

It doesn’t even seem necessary to me as the numbers speak for themselves.

Final Thoughts

The next time you will hear Janet Yellen, Christine Lagarde, or others at the head of the current system criticize Bitcoin by accusing it of being used only for illegal activities, you will only have to confront them with their contradictions by reminding them of Bitcoin’s motto:

Don’t trust, Verify.

If you do this, you will see that the numbers don’t lie: criminals greatly prefer the U.S. dollar and the euro to finance their illegal activities.

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Sorry Janet and Christine, Criminals Still Prefer the U.S. Dollar and Euro to Bitcoin