Former U.S. Federal Prosecutor Mary Beth Buchanan spoke at a panel during the Money20/20 Europe conference in Amsterdam Monday, June 4, suggesting that we need to “get rid of the negative connotations” surrounding the emerging crypto industry.
Buchanan emphasized that “a lot more” crimes have in fact been committed with fiat currencies, and expanded upon her point in a subsequent interview with CryptoNewspeople:
“I served 21 years at the [US] Justice Department and it’s not fair to say there is a greater amount of crime with cryptocurrencies. In fact I would strongly disagree with that… [what’s more], cryptocurrencies can be traced, unlike fiat currencies [cash].”
As CT’s correspondent noted, the notion that transactions involving crypto are in fact more traceable than fiat currencies can seem counterintuitive, given that achieving anonymity was one of the motivating impulses behind the invention of cryptocurrencies.
Buchanan, however, stressed that there are now many “commercially available” tools that law enforcement can leverage to trace how currency has moved on a blockchain. She mentioned blockchain-specific intelligence systems such as Elliptic and Chainalysis as prominent examples.
Nonetheless, Buchanan admitted that law enforcement “has a lot of catching up to do,” likening the challenge to the early days of the internet. She suggested that regulators, too, will need to “update” their practices in order to “keep pace,” as the outdated legislation introduced in the early 20th century for traditional securities is proving itself an awkward fit for 21st century innovations.
Buchanan is currently serving as a General Counsel to major crypto exchange Kraken, and says she has been “very involved” in the crypto industry for the past four to five years. She advocated cryptocurrencies as a “wonderful tool” that provides a “cost-effective” means for the transfer of value globally. When asked about the future of crypto adoption, Buchanan considered that we’re “already” seeing it “around the world,” suggesting its increasing use by unbanked populations.
As a recent CryptoNewspeople report showed, cryptocurrencies are indisputably exploited for illicit ends, with an early 2018 paper estimating that “approximately one-quarter of all users… and close to one-half of Bitcoin transactions…are associated with illegal activity.”
However, these findings, when placed within a broader context, fall into a more nuanced light. Whereas global illicit Bitcoin activity annually is estimated at a value of around $72 bln, the same paper cites figures for 2010 that reveal that $100 bln in fiat was spent on drugs in the US alone.