In these tumultuous times of wars and sanctions, we also hear a lot of talk about cryptocurrencies and to what extent they can allow or not to find alternative paths to financial freedom.
This is a topic that was already in vogue, first, with the story of crypto as the solution to black cash flows and recycling.
These are strong concerns, which can also alarm the population, which is led to recognize them as a danger to defend against.
Anyone who wants to give a bribe, launder money, hide it or do anything else that allows them to stay away from tax and government controls, can really do it?
In this article we will go to see in detail if it is possible to do so, in what proportion or if indeed the crime can go unpunished.
Many people will end up being quite surprised by the response, which is much more unique and one-way than you might expect.
Bitcoin will truly allow total and absolute financial freedom and, above all, is it really good for our daily life?
Are exchanges a free port?
Let’s start with the biggest question, the most banal of all, of which many people already know the answer but many others may not have a clue how these platforms work.
Binance, Crypto.com, FTX, Young Platform or whoever for it, are places where you can safely send money in the most convenient way, sometimes even in cash.
Young Platform, for example, allows you to top up your account through various supermarkets in Italy, so does this allow customers to clean up their money?
Absolutely not, and this is because all those who open an account there (or on any other exchange authorized to operate in Italy) must do the KYC, which is a practice called “know your customer”.
In this process it is necessary to give a lot of sensitive data, including a photo of an identity document; to choose between passport, identity card; or driving license.
This allows you to know with absolute certainty the customer in question, to track him financially and to pass the data to the taxman who will supervise on the cash flows of the person in question.
Furthermore, exchanges are subject to the laws in force in the country in which they operate, but this also means that the decisions of other countries can have repercussions on the decisions made on a specific ban branch.
Still taking Russia’s example, America and Europe could decide to ban Binance from opening new accounts if it doesn’t stop operating in Putin’s country.
This is clearly just a theoretical example, but it makes it very clear that exchanges are not that different from any other bank.
Are private wallets a free port?
Here it gets a little bit more complicated, as most of the private wallets are decentralized and “theoretically” free from any constraints.
The truth is that here too there are several things to clarify, since it would be too simplistic to say that it is possible to break free from any financial barrier with a wallet.
Although Metamask, Trust Wallet or others similar are decentralized and do not require KYC or documents to open an account, it must be considered a huge barrier holding them back.
In fact, it is possible to buy cryptocurrencies through deposits or in other forms that involve Fiat money, but only by switching from one crypto to another crypto.
This means that the first digital currency used to create your wallet will have to be bought elsewhere, most likely from an exchange.
It doesn’t take long to understand that the hands here too are tied by having to pass by force, sooner or later, from a centralized body unless you want to buy the assets on a hypothetical black market.
There are some exceptions to this aspect but we will look at them a little more ahead because, before continuing, it should be emphasized that even decentralized wallets can be limited in some way.
Metamask in fact ended up at the center of great controversy for having limited users from countries like Venezuela, although the functions were soon restored.
Same thing for OpenSea, the NFT marketplace that blocked all Iranian users trying to buy or sell art on them.
Easy, just a VPN, right? Absolutely not, in fact the closure of numerous accounts of Iranians who have been living abroad for years has been reported, in spite of decentralization.
Can cryptocurrencies be obtained even without an exchange?
A quick and easy answer that includes a simple yes, it is possible and not even difficult. But by itself it could mislead readers from true untraceable of funds.
Going step by step, it is absolutely possible to obtain Bitcoin or other cryptocurrencies without going through exchanges or resorting to illegal methods.
No, the black market is not the only solution, but you can simply go to the branches “ATMs” that dispense Bitcoin or other coins in exchange for cash.
So here’s the solution, I take some black money, convert it into Bitcoin through these ATMs and I amiably cheated the taxman without anyone noticing, right?
No, or at least definitely not for large sums. This is for the simple fact that, if someone illegally obtained a million dollars worth of Bitcoin, what could they do with it?
In cryptocurrencies you can’t pay almost nothing that is economically relevant, just some simple nonsense that does not go beyond a few hundred thousand euros.
Bitcoin can be spent on a macroscopic level, therefore it must be converted into Fiat currency.
For day-to-day operations or any type of money transfer outside the law, cryptocurrencies require additional and easily traceable steps than cash.
All of this and we haven’t even talked about the real reason why cryptocurrencies are the absolute worst way to break the law.
Eternal traceability of cryptocurrencies
The thing that makes you smile when it comes to cryptocurrencies and illicit money spins is the fact that the accusers probably don’t even know how they work.
When a person wants to send any crypto to another person, he will have to necessarily use a blockchain (which depends on the currency) that allows him to make the switch.
This means that it will have to request a transaction from your wallet, leave a digital signature consisting of a unique code that will be issued, printed on the blockchain printout which is public and accessible to all.
In practice, if someone wanted to send cryptocurrencies by evading the law on a blockchain, they would be leaving an indelible signature of their stupidity in a place where even the worst cop’s grandmother could find her.
And that’s not for a week, a month or a year, but forever! Yes, because transactions on a chain are branded in these printouts and will never be deleted from there.
Now, this should be enough to understand that blockchains are not the right way to pass money on the black, and they will never be in the future.
Even a single and simple euro could be tracked through thousands of wallets where it passed after generations, all only by following the signatures.
It doesn’t matter where the money was taken, who sent it, what platform it went through or any other detail, everything is and will be always perfectly visible to those who know how to search.
Read also: Scams of Cryptocurrency and How to Avoid Them!
But then why do cryptocurrencies have this reputation?
The fact that everything is traceable does not mean that everything is actually tracked by the competent bodies, a bit like in any circumstance.
Nowadays in any country in the world money is circulating under the table, but this does not mean that the competent bodies are looking for every single penny.
Sure, the general idea is always to limit this practice as much as possible with every effort, but precisely these efforts cannot be unlimited.
In the world of cryptocurrencies it works a bit the same way, with the small scams or the small illicit spins that would take too much effort to prosecute.
This is for the simple fact that, in addition to adding additional levels of difficulty with respect to cash, it has traceability that will not decay in time.
It is not unrealistic to think that, although today there are no means to stop small illegal transactions, they will arrive in the next future.
Imagine a software that scans the blockchain looking for any suspicious movements or, who knows, some additions to the code that allow you to control everything easily.
These are just assumptions, of course they won’t become real in this precise form, but it is just one of the infinite possibilities offered by technology.
Add to this that, if such a system were implemented, it would probably also have to go back in time, then you understand how unrealistic it is to think of circumventing laws or sanctions for any party involved.
