Why Is Cryptocurrency Associated With Criminal Activity?

Despite countless examples to the contrary, many people still toss cryptocurrency and criminal activity into the same bucket. But is this born out of ignorance or fact? We all fear the unknown. Perhaps it’s partially because, to the layman, digital currencies suddenly seem to be taking over.

Despite proving that cryptocurrency is about more than evading taxes, why do so many people still make the link between Bitcoin and nefarious deeds? 

The Silk Road

If The Silk Road conjures up images of an ancient trade route between the East and West, and intrepid merchants thirsty for adventure, your version needs a little updating. Many people think of cryptocurrency and criminal activity because of The Silk Road website that used Bitcoin as its main currency.

It was an online marketplace for buying and selling drugs, weapons, and all things illicit on the dark web. Alongside giving rise to Bitcoin’s popularity, The Silk Road also tainted its reputation. Just like that toxic ex-lover you knew was bad for you, Bitcoin and The Silk Road just couldn’t be separated.

When Bitcoin reached parity with the dollar in 2011, buying and selling on The Silk Road was easy. It was also relatively anonymous–until the Feds began to investigate, find, and prosecute criminals and the website was shut down. But the stain on Bitcoin’s reputation lived on.

Cybercrime

A depiction of cybercriminal in a black hoodie with a tech-related backdrop.

Another reason people associate cryptocurrency and criminal activity is cybercrime. Unfortunately, being natively digital, cryptocurrencies like Bitcoin fast became cybercriminals’ payment method of choice when using Ransomware. Since there’s no physical location connected to a cryptocurrency wallet, the perpetrators are much harder to trace.

Think of Bitcoin and other cryptocurrency wallets as the cyber equivalent of an offshore account in the Cayman Islands. Drug dealers and crooks have used those for many years, now they’re just on the net.

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Currency Trader 2 years ago Member's comment

Let's be honest... #cryptocurrencies are often associated with criminal activity because it's the criminals' preferred method of payment. Untraceable, and yes, essentially anonymous despite what it says here.