Introduction
Significant transformations are taking place in the world of illicit activities involving cryptocurrency. Recent data from a 2023 report by TRM Labs reveals that Bitcoin is no longer the preferred asset for criminals. This shift in the landscape of financial crime has important implications for policymakers and provides valuable insights for shaping effective regulatory frameworks.
The Shift in Crypto Volume Distribution
The TRM Labs report highlights a significant change in the distribution of illicit crypto volume. In 2016, Bitcoin accounted for 97% of crypto hack volume, but by 2022, its share had dropped to just 3%. Ethereum and Binance Smart Chain emerged as dominant players, with 68% and 19% shares, respectively. Meanwhile, assets on the TRON blockchain replaced Bitcoin as the preferred currency for terrorist financing, representing 92% of such activities in 2022.
Ramifications of the Shift
This shift challenges the notion that Bitcoin is synonymous with criminal activity. Bitcoin has long been considered a natural choice in cryptofinance due to its network effect, market dominance, and liquidity. However, the ongoing separation of equilibria indicates that bad actors are now opting for alternative cryptocurrencies.
Policy Takeaways
This shift in financial crime patterns offers important lessons for policymakers. It emphasizes the need to closely examine specific assets and blockchains favored by illicit actors and take appropriate action. Moreover, it provides an opportunity to replace the current generic perspective on digital assets with a more nuanced understanding. Policymakers should shape narratives on criminal usage and develop tailored policies accordingly.
Insights from Game Theory
Adopting a game-theoretic approach enables a comprehensive understanding of the ecosystem, involving product developers, regulators, and both good and bad actors. It reveals that independent actions and perspectives generate a variety of scenarios, making it impossible for any single player to control outcomes. Understanding illicit finance through a game-theoretic lens allows policymakers to predict next steps and prepare proactively.
The Need for Predictive Systems
Traditionally, policy making to combat illegal fund flows has been reactive, with regulators responding to emerging risks. However, the fast-paced evolution of digital assets requires a more proactive approach. The ongoing wave of crime displacement away from Bitcoin underscores the necessity of equipping policymakers with predictive systems that forecast future patterns of illicit fund flows. This will enable quicker responses to new threats.
Counter-crime Initiatives
Examining the changing usage of Bitcoin can also provide valuable insights for counter-crime professionals. Crime rings that still rely on Bitcoin may indicate a lack of agility in their leadership. By assessing their position on an "agility spectrum," law enforcement can gain further actionable insights, such as the level of resourcefulness and technical expertise of a syndicate. This knowledge can help determine the unique effort required to combat each crime ring.
Conclusion
The shift of financial crime away from Bitcoin highlights the need for a nuanced approach to regulatory and policy frameworks for digital assets and blockchains. Applying broad strokes to the entire spectrum of cryptofinance when discussing criminal usage can be misleading. Policymakers must recognize the evolving nature of financial crime and adapt accordingly. By doing so, they can effectively combat illicit activities and create a safer ecosystem for digital transactions.
This is a guest post by Debanjan Chatterjee. The opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
Frequently Asked Questions
What precious metals can you invest in for retirement?
Silver and gold are two of the most valuable precious metals. They're both easy to buy and sell and have been around forever. Consider adding them to the list if you're looking to diversify and expand your portfolio.
Gold: Gold is one of man's oldest forms of currency. It is very stable and secure. It's a great way to protect wealth in times of uncertainty.
Silver: Investors have always loved silver. It's a great option for those who want stability. Silver tends instead to go up than down, which is unlike gold.
Platinium: Platinum is another form of precious metal that's becoming increasingly popular. It's like silver or gold in that it is durable and resistant to corrosion. It is however more expensive than its counterparts.
Rhodium: Rhodium is used in catalytic converters. It is also used in jewelry-making. It is also quite affordable compared with other types of precious metals.
Palladium – Palladium is an alternative to platinum that's more common but less scarce. It's also much more affordable. Investors looking to add precious and rare metals to their portfolios love it for these reasons.
How much of your IRA should include precious metals?
When investing in precious metals, the most important thing to know is that they aren't just for wealthy people. They don't require you to be wealthy to invest in them. There are many ways that you can make money with gold and silver investments, even if you don't have much money.
You might think about buying physical coins such a bullion bar or round. It is possible to also purchase shares in companies that make precious metals. You might also want to use an IRA rollover program offered through your retirement plan provider.
You can still get benefits from precious metals regardless of what choice you make. Even though they aren't stocks, they still offer the possibility of long-term growth.
And unlike traditional investments, they tend to increase in value over time. If you decide to make a sale of your investment in the future, you will likely realize more profit than with traditional investments.
Can I have physical gold in my IRA
Not just paper money or coins, gold is money. It's an asset that people have used for thousands of years as a store of value, a way to keep wealth safe from inflation and economic uncertainty. Investors use gold today as part of their diversified portfolio, because it tends to perform better in times of financial turmoil.
Many Americans now invest in precious metals. Although owning gold does not guarantee that you will make money investing in it, there are many reasons to consider adding gold into your retirement portfolio.
One reason is that gold has historically performed better than other assets during periods of financial panic. Between August 2011 to early 2013, gold prices rose close to 100 percent while the S&P 500 fell 21 per cent. During those turbulent market conditions, gold was among the few assets that outperformed stocks.
Gold is one of the few assets that has virtually no counterparty risks. Your stock portfolio can fall, but you will still own your shares. If you have gold, it will still be worth your shares even if the company in which you invested defaults on its debt.
Finally, the liquidity that gold provides is unmatched. This means you can easily sell your gold any time, unlike other investments. Because gold is so liquid compared to other investments, buying it in small amounts makes sense. This allows you to take advantage of short-term fluctuations in the gold market.
What precious metal is best for investing?
This depends on what risk you are willing take and what kind of return you desire. Gold is a traditional haven investment. However, it is not always the most profitable. For example, if you need a quick profit, gold may not be for you. You should invest in silver if you have the patience and time.
Gold is the best investment if you aren't looking to get rich quick. Silver might be a better investment option if steady returns are desired over a long period of time.
Statistics
- The price of gold jumped 131 percent from late 2007 to September 2011, when it hit a high of $1,921 an ounce, according to the World Gold Council. (aarp.org)
- Contribution limits$6,000 (49 and under) $7,000 (50 and up)$6,000 (49 and under) $7,000 (50 and up)$58,000 or 25% of your annual compensation (whichever is smaller) (lendedu.com)
- Indeed, several financial advisers interviewed for this article suggest you invest 5 to 15 percent of your portfolio in gold, just in case. (aarp.org)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
External Links
irs.gov
cftc.gov
finance.yahoo.com
- Barrick Gold Corporation (GOLD) Stock Price, News, Quote & History – Yahoo Finance
wsj.com
- Saddam Hussein’s InvasionHelped Uncage a Bear In 1989 – WSJ
- You want to keep gold in your IRA at home? It's not exactly legal – WSJ
How To
Gold Roth IRA guidelines
Starting early is the best way to save for retirement. Start saving as soon and as often as you're eligible (usually around 50 years old) and keep going until retirement. It's vital to contribute enough money each year to ensure adequate growth on an ongoing basis.
You can also take advantage of tax-free savings opportunities like a traditional 401k (k), SEP IRA (or SIMPLE IRA). These savings vehicles allow you to make contributions without paying taxes on earnings until they are withdrawn from the account. This makes them a great choice for people who don’t have access employer matching funds.
Save regularly and continue to save over time. You will lose any potential tax advantages if you don't contribute enough.
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By: Debanjan Chatterjee
Title: The Changing Landscape of Financial Crime: Lessons from Bitcoin
Sourced From: bitcoinmagazine.com/legal/game-theory-of-financial-crime-policy-takeaways-from-bitcoin
Published Date: Mon, 29 Jan 2024 14:32:01 GMT
