Bitcoin Cash Machines (BTC) Used For Human Trafficking?
This accusation might make one smile if the potential consequences weren’t so tragic. According to a GAO report, cryptocurrencies, and more particularly distributors of BTC or other digital assets, can promote the financing of illegal activities involving all kinds of trafficking, including sex trafficking.
The report puts forward two main justifications for reaching this conclusion. The first is that the operators of distributors in the United States do not have a legal obligation to indicate their exact location. For the GAO, this lack of obligation may entail high risks of financing criminal activities involving drug and human trafficking, including sex trafficking.
The second justification relates to the relative anonymity of distributors. Although the report acknowledges that it is not 100% anonymous, operators do not always collect information on the identity of users. As a result, cryptocurrencies, and not just distributors, can be attractive to criminals of all kinds.
To support its claims, the GAO quotes the FBI which, itself, notes that BTC distributors can be used for illegal purposes. This is not the first time that the American authorities have taken an interest in these kiosks.
In the report, GAO explains that 27 platforms are believed to be involved in funding human trafficking. 15 of them accept payments in cryptocurrency and 3 only accept payments in BTC and others. However, he seems to draw the conclusion that distributors are also used to finance these activities from his previous observations, without providing formal proof.
👉 To read – The US tax authorities are investigating Bitcoin ATM operators
Bad publicity from bitcoin (BTC) distributors in the United States and elsewhere
Bitcoin ATMs, sometimes called Bitcoin ATMs, allow everyone to buy and sell their favorite cryptocurrency around the corner or any type of shops. They are very popular in some countries.
Thus, according to the site Coin ATM Radar, the number of distributors has exploded in the United States, from around 560 in January 2017 to more than 30,000 five years later.
In Europe, the distribution of BTC distributors is very uneven. They are rather popular in Spain (199 distributors), Switzerland or Austria (142 for each of the two countries).
On the other hand, France is very far behind, with only two Bitcoin ATMs which are working at the time of this writing. This hexagonal desert is partly linked to a money laundering case involving the country’s main operator.
In the United States, the bad publicity of these kiosks with the authorities particularly affects the distributors of BTC. Indeed, on page 11 of the aforementioned report, the authors explicitly write that Bitcoin is the most used cryptocurrency to finance all kinds of traffic, including trafficking in human beings for sexual purposes.
👉 To go further – Bitcoin distributors (BTC): why is France such a desert?
Do Bitcoin Cash Machines (BTC) Make It Easy To Fund Criminal Activity?
On this point, the GAO seems confident. However, it is possible to question this assertion on many points. First of all, the GAO is the equivalent of the Court of Auditors in the United States. In other words, its competence is mainly focused on public accounts. Why did the GAO write this report?
As a preamble to the latter, the GAO specifies that it was asked by members of the American Congress ” to check whether the use of cryptocurrencies can facilitate sex trafficking and drug trafficking. ”Thus, the authority not only looked at ATMs, but concluded that they were better able to facilitate this use.
Then, the GAO made a factual error from the first page of the report, however 84 pages long, by asserting that the “ anonymization features offered by cryptocurrencies can allow their use by criminals to avoid detection when paying for illegal activities. “
However, it has been proven many times that cryptocurrencies, and more particularly Bitcoin, were not anonymous, but pseudonyms. In addition, the recent Chainalysis report showed that these illicit transactions only represent 0.15% of all crypto-asset transactions.
However, if 0.15% is a very low rate, it still represents $ 14 billion. Through which channels do these 14 billion pass? What is the contribution of distributors to these 14 billion? This sensitive question does not have a precise answer at this time, but the GAO seems to claim that Bitcoin ATMs can be used to fund this type of activity. Thus, it would be very interesting to know precisely the channels through which these transactions are carried out.
👉 To read – Criminal activity only represents 0.15% of crypto transactions
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