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Because transactions can be traced, Michael Gromek, co-chair of the Global Coalition to Fight Financial Crime’s Digital Asset Task Force committee, believes that cryptocurrencies are not a haven for criminals.
During an interview with Kitco News at the Future Blockchain Summit in Dubai, Gromek made the statement. He stated that it is not true to conduct transactions on the blockchain with the expectation of escape and impunity.
It is not smart to make transactions on the blockchain using pseudo-anonymous currencies because most suspects can be easily tracked.
Gromek revealed that the Digital Assets Task Force is able to identify criminals by working with exchange Know Your Customer (KYC) data and implementing anti-money laundering (AML) regulations, citing reports that indicate that illicit activities on the blockchain account for only 0.15 percent of all transactions.
The financial crime consultant went on to say that even so-called “privacy coins” like Monero (XMR), which use intricate codes to hide wallet addresses, can be tracked down by authorities.
Gromek’s advice for investors According to Gromek, investors still need to be on the lookout for con artists and scammers in order to avoid falling prey to them.
Working only with trading venues that are compliant with regulations in their jurisdiction and assessing risks prior to investing in any project are two methods for accomplishing this.
His disclosure comes after a number of privacy coins have recently fallen foul of regulators.
In September that the cryptocurrency exchange Huobi Global removed DASH, XMR, ZEC, ZEN, and a few other privacy coins from its listing.
Similarly, the popular privacy tool Tornado Cash, which is based on Ethereum, was banned by the Office of Foreign Assets Control (OFAC) of the United States Treasury for facilitating money-laundering transactions, particularly for hackers associated with North Korea.
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Tornado Cash runs self-executable code and does not require any permissions. The developers destroyed their admin keys in May 2020, preventing them from viewing or altering any transactions that take place on their protocol.
The group argues that financial privacy is essential to freedom and that, aside from publishing code to GitHub, they do not have much control over the protocol.
According to co-founder Roman Semenov, the cryptographic method (MPC) used to destroy their admin keys makes Tornado Cash transactions trustless and completely unstoppable.
The protocol has been cited as a vehicle for money laundering and is frequently criticized for its use by hackers, who can store their stolen funds there. Even though the protocol is kept very secret, some people have argued that if there is a large deposit and little liquidity, it might be possible to track transactions.
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