Cryptocurrencies Should be Enabled to Blacklist Criminal Holdings

Cryptocurrency is seen as a new, wild, reckless, revolutionary, and sometimes shady financial instrument. In addition to legitimate transactions, a disproportionate amount of attention is paid to the criminal use of cryptocurrency to store wealth, collect payments, transfer illicit funds, and launder money. Malicious people, who victimize others, use it as a tool to hide and protect their ill-gotten gains. Law enforcement and even currency champions are mostly powerless to do anything about it. Criminals will continue to use cryptocurrency as their haven unless something is improved.

Recently, the U.S. Treasury identified several foreign nationals who were laundering vast sums of money and using cryptocurrency to support illegal drug smuggling. The U.S. Treasury notified legitimate exchanges to ‘blacklist’ any transactions originating from these drug kingpins, but it is more likely that the unlawful assets will be moved, shifted, and eventually extracted by the criminals. If the funds were in a bank they could be seized. Decentralized cryptocurrencies, like Bitcoin and Ethereum, don’t work that way. This is exactly why criminals use crypto so much, as it keeps their assets out of reach from authorities.

A recent Chinese Ponzi scheme involving the PlusToken netted criminals $3 billion since 2018. With…