What’s the first thing that comes to your mind when someone mentions cryptocurrency? If
you’re like most people, then it’s probably the booming stock price of crypto or the fact that it’s a
great investment for your money.
Few people know that cryptocurrency has another face, one that Elon Musk and other
proponents of crypto rarely mention. The hidden truth is that people are using crypto for less
than wholesome purposes.
If you’ve been brushing up on your ancient Greek, then you might say this is no big surprise, as
the term cryptocurrency derives from the Greek ‘crypto’, which means hidden or secret. But
when Timothy C. May coined the term in 1988, he meant that cryptocurrencies were meant to
be hidden from governmental controls and not because they facilitated illicit activities.
Authorities claim that crypto has been used by criminals to help them sell illegal products and
services. And this has become one of the leading arguments in favor of regulating crypto
globally. Governments are aiming to track crypto transactions and identify any criminal users in
their countries.

The Role of Cryptocurrency Exchanges
Most cryptocurrency exchanges do not encourage criminal activities. In fact, many have been
attacked by hackers bent on stealing their users’ assets. For example, Cryptopia, one of the
largest online digital trading platforms, was attacked by hackers in May 2019 and had much of
its crypto stolen.
Users calling the Cryptopia support number were told that the company had things under
control. But later, Cryptopia announced that it would be shutting down, liquidating its users’
Although other trading platforms like Cryptopia have been victims of criminal activity, some have
undoubtedly facilitated criminals. These dark exchanges, as they are called, exist on the dark
web, where it is almost impossible to trace them. Governments claim that these dark exchanges
provide several services to criminals.
One such service is called ‘mixing’. In a mixer or tumbler, a user’s assets are diverted into
different revenue streams so that it becomes harder for regulatory agencies to identify and track
user assets. A fee is, of course, charged for this service, which can be as high as 3%.
Exactly what proportions of assets are diverted to which particular revenue stream is
determined entirely at random by a software program. This randomness makes it even harder
for the authorities to identify a single user.

Another service being offered by dark exchanges is called shapeshifting. In shapeshifting, a
user’s assets are converted from one cryptocurrency into another.
For example, if a user has assets in Bitcoin currency, then by shapeshifting, they can be
converted into Ethereum currency. New amounts will be determined by whatever the exchange
rate is at that particular moment.
Online exchanges are now offering digital wallets to their users that are encrypted using
extremely strong code. Wasabi and Samurai are such wallets that are almost impossible for
anyone to hack. So if a user deposits assets into a wallet like this, the funds effectively become
invisible due to the high privacy protection the software provides.
But these services that can facilitate criminals are not available on popular online exchanges
like Coinbase or Cryptopia. So if you call the Cryptopia support number and ask for mixing
services, you will be disappointed. In fact, many online exchanges are actively implementing
measures to deter criminals from using their platforms.

The Case of Silk Road
Perhaps the most infamous case of the misuse of crypto is Silk Road. Silk Road was an online
black market operational from February 2011 to October 2013, when the FBI shut it down.
Users could log onto Silk Road like any other online market and browse the wares that people
had put up for sale.
If a user found an item desirable, they could use cryptocurrency to pay for it, and it would be
delivered to them by mail. The problem was that many of the products and services offered for
sale were illegal in the US, where Silk Road was based.
After the FBI’s raid, Silk Road’s inventory was confiscated and examined. More than 10,000
different products were available for purchase. Seventy percent of these products were drugs
that were illegal in the US. Fake driver’s licenses were also available for purchase.
Silk Road did, however, have certain restrictions on what products and services sellers could be
placed on the market. The rule was that any product or service that could be used to ‘harm or
defraud’ any person would not be allowed on the market. This restriction sets Silk Road above
other illegal markets that have no restrictions whatsoever on what they sell.
For instance, users could not buy weapons on Silk Road as they could be used to hurt other
people. Stolen credit cards were not available for sale either as they would allow a buyer to
steal another person’s money. You may be surprised to learn that some illegal online markets
offer assassination services as well, but Silk Road did not allow that on their market.
In fact, many of the items available for sale on Silk Road were perfectly legal. For example,
users could buy and sell art, all kinds of books were also available, and users could even buy
cigarettes from the market.
Another similar case to Silk Road was Cyber Bunker. Like Silk Road, Cyber Bunker was an
illegal online market that conducted its transactions in crypto. Cyber Bunker began conducting

business in May 2020 in the German city of Meso. However, Europol shut down the black
market within the year.
Cyber Bunker had no rules about what users could buy or sell. The authorities claimed that
weapons and drugs were both being traded on the market. It was only after a clever sting
operation that Europol was able to bring down the black market.
How to Fight Cryptocurrency Crime
Governments all over the world are beginning to realize that crypto can be used for criminal
activities. As a result, regulations are being applied to crypto exchanges to monitor users’
transactions. The problem is that crypto is something completely new, and it is taking
governments time to decide what to do about them.
Much of the crime associated with crypto is not as spectacular as the news media would have
us believe. Most people who face criminal charges related to crypto aren’t familiar with the laws
governing crypto and who have inadvertently committed tax fraud.
Nevertheless, governments are certain that more serious criminals are using crypto to get away
with their activities. For example, cryptocurrency has been used by terrorists to finance their
activities, and numerous criminal organizations are using crypto to launder their drug money.
One problem with cryptocurrency is that it can’t be used to buy anything directly. There are very
few retailers at present who accept crypto as a form of payment. Instead, you have to convert
crypto into conventional currency before you can use it to buy anything.
When criminals attempt to turn crypto into real cash, they are vulnerable to being caught. Some
online gambling websites allow players to convert crypto into real cash. Thousands of online
ATMs have also opened that allow users to exchange cryptocurrency for real currency – at a
modest cost, of course.
In addition, some individuals offer to provide you with real cash in exchange for cryptocurrency.
They are called ‘treasure men’ and can be found listed on Hydra, a marketplace on the dark
web. These ‘treasure men’ accept online crypto and then give you a set of coordinates where
you can find a suitcase full of cash waiting for you.
Just remember that services such as these are not legal. If you call the Cryptopia support
number and ask for ‘treasure men’ services, you are likely to be reported to your government for
attempting to commit a crime. So this is something that you should definitely not do.
To combat the rising crime, companies like Chainalysis are emerging. Chainalysis is a crypto
forensic company that is based in the US. Companies like these can help governments and
companies track the movement of crypto and identify individuals. They can also ‘unmix’ crypto
funds if they have sufficient data and computing power.
Hackers are also using illegal markets to rent out ransomware software that they’ve created.
Ransomware software encrypts all data on a device, effectively shutting it down until a certain
amount of cryptocurrency is entered into the system. Recently, the Colonial Pipeline suffered a
ransomware attack and had to pay the hackers in crypto.

Crypto forensic companies claim that they can track these crypto ransoms as every transaction
is recorded in the blockchain code behind a cryptocurrency. This revelation implies that crypto is
not as anonymous as people think and can be tracked given enough effort.
What’s the Verdict?
Although criminals are using crypto to get away with crimes, governments and crypto forensic
companies are taking a stand against them. Governments are implementing regulations that will
reduce the anonymity of crypto, and crypto forensics is using new technologies and coding to
help track down criminals who are using crypto.
As a result, it appears that, in the future, using crypto will no longer be a sure way to get away
with crime.