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Breaking News: Coinbase Confirms DOJ Investigation Following Major Security Incident

How An Ex-CIA Director Proved Bitcoin Use in Crime is Declining

Reynaldo Marquez
Reynaldo Marquez
4 years ago
2 mins read
Bitcoin BTC BTCUSD

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Former Central Intelligence Agency (CIA) Acting Director Michael Morell wrote a report titled “An Analysis of Bitcoin’s Use in Illicit Finance”. The ex-government employee had over 33 years working at the Agency.

Published by the Crypto Council for Innovation, Morell’s investigation attempts to disprove a thesis defended by many authorities around the world: Bitcoin is a tool to finance cybercrime and other illicit activities.

Morell considers Bitcoin to have a growing momentum and a spreading use as a store of value. Endorsed by companies like Tesla and MicroStrategy, the cryptocurrency is riding a major wave of adoption.

To achieve his goal, Morell consulted many experts in financial services, payment systems, global intelligence, even former senior government officials. The Ex-CIA director himself used to believe Bitcoin and cryptocurrencies are a convenient way of sending money anonymously.

However, the research made him changed his mind. He was able to reach important conclusions: Bitcoin’s use as an illicit finance tool is “significantly overstated” and:

The blockchain ledger on which Bitcoin transac-tions are recorded is an underutilized forensic tool that can be used more widely by law enforcement and the intelligence community to identify and dis-rupt illicit activities.

Bitcoin’s financial use is predominantly legal

The research conducted by the former CIA Director indicates that there is no data that supports two of the most common assertions regulators make when it comes to Bitcoin.

First, that its use for illicit financial transactions is growing. Second, that this is the cryptocurrency’s primary use case. The report says:

(…) the common belief that Bitcoin is both primarily and increasingly used for purposes of illicit finance is “un-informed and not based on data” and that “there are no numbers and no methodologies” supporting it.

Bitcoin BTC BTCUSD
Source: Chainalysis

Results from the polemic analytics firm Chainalysis indicate that of Bitcoin’s total activity, dating from 2017 to 2020, less than 1% is used for non-legal purposes.

Further data provided by analytics firm CipherTrace claims that of BTC’s overall trading volume only 0.5% can be attributed to illicit activity. In contrast, fiat currencies’ use in non-legal transactions is estimated on the order of 2% to 4%. The report says:

A former CIA analyst added credence to the above estimates due in part to the difference in overall volume, most illicit activity still takes place in the traditional banking system and not via cryptocurrency.

Therefore, Morell concluded that illicit use of Bitcoin and cryptocurrencies is “not higher than it is in the traditional banking system”.

Bitcoin is trading at $63.063 with 4.9% profits in the past day. In the weekly and monthly chart, BTC has 7.5% and 2.9% gains respectively.

Bitcoin BTC BTCUSD
BTC holding its bullish trend in the 24-hour chart. Source: BTCUSD Tradingview
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Reynaldo Marquez
Reynaldo Marquez

Reynaldo Marquez

A literature major, Reynaldo Márquez has been deeply immersed in the crypto industry since 2017. His journey began with translating articles for various crypto news outlets, a role he took on with zeal. In 2018, amidst a challenging market, he embraced his first writing assignment, demonstrating his unwavering commitment to the nascent industry and the promise of change it bears for many people worldwide.
In March 2021, he joined the prestigious crypto news outlet NewsBTC and Bitcoinist, where he not only reported on the latest crypto news but also had the privilege of interviewing some of the industry's most influential figures. A year later, his dedication and hard work were recognized, and he was promoted to Managing Editor, a position he currently holds with pride.
He believes in honesty, good communication, hard work, and the power of cryptocurrency and its potential to transform people's lives, especially those alienated by the legacy financial system. Born in 1992 in Venezuela, Reynaldo is familiar with how governments and central banks can negatively affect people, their everyday lives, and their futures by creating inflation and erasing their hopes for a better future. Thus, like many Venezuelans, he embraced this new technology to help him and his family navigate difficult times.
In another life, Reynaldo would have pursued a career as an investigator, most likely tracking down the origins of the Cyberpunk movement with the publication of William Gibson’s ‘Neuromancer.’ The intersection between fiction and reality, with the materialization of Bitcoin in 2009, would have allowed him to dive deep into the crypto sphere as something more than a financial phenomenon but also a cultural shift in society that was brewing since the XX century, and maybe even sooner, in the XIX century with the publication of Henry David Thoreau’s ‘Civil Disobedience.’
But that’s for another life. In this one, Reynaldo has been trading to improve his trading skills. Since 2023, he has been trying to learn Python to create successful strategies and find ways to execute them. It is a difficult task, which continues to keep him busy today and will most likely continue to keep him busy in the near and long term.
In his free time, he enjoys lifting heavy objects, reading, watching movies, and listening to his favorite music. Some of his favorite authors are Walt Whitman, William Faulkner, Allen Ginsberg, James Baldwin, Raymond Carver, Ray Bradbury, George Orwell, Mario Vargas Llosa, Reinaldo Arenas, Rafael Cadenas, and many others. Lately, he has been primarily interested in reading about dystopic societies, a topic that deeply resonates with the crypto industry.
Since 2023, he has lived in Spain with his wife. He loves the weather, the food, and the people and their culture. They both expect to travel much more within the country they now call home and beyond its border. He hopes to retire with his wife, maybe in a quiet place near a beach, but most likely in a city close to a library and a university with his kids and, hopefully, grandkids.

Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

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Strict editorial policy that focuses on accuracy, relevance, and impartiality
Created by industry experts and meticulously reviewed
The highest standards in reporting and publishing
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