A recent report highlights that despite criticisms against cryptocurrencies, cash remains the primary tool for criminals.

Cryptos Fighting Crime

According to the report, regulated crypto platforms offer valuable support to government agencies by utilizing blockchain transparency to fight crime and enhance national security. Merkle Science showed that only 0.61% of USDT and 0.22% of USDC transactions were possibly linked to crime. Chainalysis reported that in 2023, illicit activity in crypto was only 0.34%, significantly lower than traditional finance figures.

Cash: A Look from the Past

Unlike cryptocurrencies, traditional financial systems require more complex procedures for tracking transactions. While crypto allows tracing of funds via the blockchain, in TradFi, obtaining financial reports involves legal processes. Cash remains the top choice among criminals; the DEA’s 2024 report confirmed cash's dominance in the drug trade due to its anonymity.

KYC or KYT: Which to Choose?

In the report, Agent Whitaker noted that the traceability of transactions on the blockchain is a significant innovation. Know Your Transaction (KYT) using blockchain transparency offers constant updates on transaction data, aiding in sanctions compliance and risk reduction. KYT allows crime-fighting agencies to track fund flows in real-time, which is not possible in the traditional finance sector.

Currently, cryptocurrencies show significant potential in crime fighting due to their transparency. However, cash remains a popular tool due to its anonymity, calling for stricter countermeasures from law enforcement agencies.