The United States President Donald Trump recently alleged that cryptocurrencies like Bitcoin primarily serve as a tool for bad actors using it for illegal transactions.
Treasury Secretary, Steve Mnuchin also chose not to distance himself from such talks in a Thursday interview on CNBC Squawk box, claiming that “billions of dollars of transactions going on in bitcoin and other cryptocurrencies are for illicit purposes.”
Those allegations to be fair may be true, but Steve Mnuchin showed partiality when CNBC analyst, Joe Kernen reminded him that the United States Dollar, is also used by bad actors for illegal purposes.
Precisely, Joe had said that “cash is laundered all the time and is used for nefarious activities.”
Mnuchin’s response after a slight pause?
I don’t think that’s accurate that cash is laundered all the time. We have the strongest AML system in the world. […] We combat bad actors in the U.S. dollar every day to protect the U.S. financial system.
Joe Kernen however, who is fast becoming a Bitcoin evangelist reinforced the fact that historically, criminals have successfully carried out nefarious acts with none of those involving Bitcoin.
Yet, Steve Mnuchin “pushed back on that,” and instead focused on how the U.S will police Bitcoin and make sure that “it doesn’t become the equivalent of Swiss-numbered bank accounts, which were obviously a risk to the financial system.”
Clearly, the U.S Treasury Financial Secretary could not admit on CNBC that the one problem they’ve identified as Bitcoin’s weakness also exists in the United States Dollar, and of course every other fiat currency.
Bitcoin Vs Dollar Illegal Activity Stats
In the end, Steve Mnuchin’s validation may not be needed with the Treasury that he heads confirming last year that “domestic financial crime, excluding tax evasion, generates approximately $300 billion of proceeds for potential laundering.”
That estimate may even be mild, with Bitcoin enthusiast, Anthony Pompliano stating that $2 trillion (or more than 6.5x of the entire crypto market cap) was laundered last year.
With Bitcoin certainly not involved in that figure, it may be safe to say that any allegation that a larger portion of the cryptocurrency’s circulating supply is used for illegal activities is a fad.
In fact, Coinfomania recently reported data from Chainalysis as showing that illicit transactions comprised less than 1% of all economic Bitcoin activity in 2018, down from 7% in 2012.