How is blockchain being used for illegal activities?

While the anonymity of the blockchain network protects users from hacking and ensures their privacy, it also allows for illegal transactions and activities.

  • The Silk Road, an illegal drug and money-laundering bazaar on the dark web that existed from 2011 until 2013, when the FBI shut it down, is perhaps the most well-known example of blockchain being used for criminal activities.

  • Users can buy and sell illegal things and transact without being tracked on the black web by using the Tor Browser and making illicit purchases in Bitcoin or other cryptocurrencies.

  • According to current US legislation, financial service providers must gather information about their customers when they open an account, authenticate each customer’s identity, and check that consumers do not appear in any known or suspected terrorist organizations.

This system has both advantages and disadvantages. It allows anyone to access financial accounts, making it easier for criminals to transact.

Many have claimed that the positive uses of cryptocurrencies, such as banking the unbanked, outweigh the negative uses, mainly as most unlawful activity is still carried out in an untraceable manner.

While Bitcoin was initially utilized for such purposes, criminal behavior has shifted to other cryptocurrencies like Monero and Dash because of its transparency and maturity as a financial instrument. Illegal conduct now makes up a tiny percentage of all Bitcoin transactions.