DEA: Bitcoin Now Dominated By Speculators

An agent from the U.S. Drug Enforcement Administration has said that bitcoin is now dominated by speculators and investors, with usage by criminals now significantly reduced from five years ago.

Lilita Infante made the remarks in discussion with Bloomberg, reflecting on the changing makeup of the cryptocurrency markets over the last five years. In 2013, it was thought that as much as 90% of all cryptocurrency transactions were processed in connection with criminal activity.

However, with the increasing profile and mainstream usage of cryptocurrencies like bitcoin in the years since, that figure has fallen to a little under just 10%. This chimes with the growing interest in bitcoin as a speculative asset, and the increasing usage of bitcoin as a proxy for payments and transactions online.

According to Infante, this was a product of both rising transaction volumes, and of a decline in criminality relying on cryptocurrency for pseudonymity.

“The volume has grown tremendously, the amount of transactions and the dollar value has grown tremendously over the years in criminal activity, but the ratio has decreased. The majority of transactions are used for price speculation.”

While there has been a marked shift in the balance between legitimate and illegitimate uses of currencies like bitcoin, the period has still seen an increase in the volume of criminal transactions.

With the growth in dark web transactions through bitcoin and other cryptocurrencies, total volumes have still risen over the period, in line with the growth in total demand. However, according to Infante, it is the proportions between legitimate and non-legitimate money that have shifted ground.

This has led US law enforcement agencies to develop technologies to keep a closer eye on bitcoin transactions, using blockchain technologies to trace transactions in instances of terrorism financing, money laundering and international drugs trafficking.

Infante said the DEA “still have ways of tracking them”, citing the fact that the majority of these transactions still take place on the public bitcoin blockchain.

“The blockchain actually gives us a lot of tools to be able to identify people … I actually want [criminals] to keep using them.”



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