- While all cryptocurrency transactions are recorded on the blockchain, the identities of the parties involved are often pseudonymous. This can make it more difficult to trace transactions back to individuals, although it's worth noting that this is not absolute anonymity. Law enforcement agencies have increasingly sophisticated tools and techniques to analyze blockchain transactions.
- Cryptocurrencies operate on decentralized networks, which means there is no central authority (like a government or financial institution) that can freeze or seize assets. This can make cryptocurrencies appealing for illicit activities.
- Cryptocurrencies can be accessed and used from anywhere with an internet connection. This makes it easier for criminals to move funds across borders without dealing with banks or other regulated financial institutions.
- In cases of ransomware attacks, criminals often demand payment in cryptocurrency, as it is difficult to trace and can be quickly transferred.
- Cryptocurrencies facilitate easy transfer of funds between parties, without the need for a third-party intermediary. This allows for faster transactions, even across borders.
- Some criminals might also use cryptocurrencies as a form of investment, hoping that their value will increase over time.
However, it's crucial to emphasize that the use of cryptocurrencies for criminal activities today represents a small fraction of their overall use. The vast majority of cryptocurrency users do so for legitimate purposes, such as investment, remittances, privacy, or because they believe in the technology's potential to change the financial system. Law enforcement agencies are also getting better at tracking and tracing illicit activities involving cryptocurrencies, reducing their appeal for such purposes.