IMF says crypto-currency tech can be used against crypto criminals




International Monetary Fund
International Monetary Fund

"What exactly is the potential of #crypto-assets?" is the question people around the world are asking.


The Managing Director of the International Monetary Fund Christine Lagarde, says governments around the world could harness the technology to stop illegal activity.

The anonymity of currencies such as Bitcoin means they are used by criminals and terrorists, she said.

But the technology could be turned against such nefarious activities.

Regulators around the world have called for greater cryptocurrency oversight.

Criminal use

Although the technology underlying digital assets have been praised as a way to speed up financial transactions and reduce cost, the anonymity behind crypto-currency trading is a big worry, Ms. Lagarde said in a blog post.

What makes the technology so appealing is also what makes it "dangerous," she said, as it can be used as a "major new vehicle for money laundering and the financing of terrorism".

One recent example reveals the scope of the problem.

In July 2017, an international operation led by the United States shut down AlphaBay, the largest online criminal marketplace on the internet. For more than two years, illegal drugs, hacking tools, firearms and toxic chemicals were sold all over the world through AlphaBay. Before the site was taken offline, more than $1billion had been exchanged through crypto-assets.
The technology behind cryptocurrencies can be harnessed to mitigate this "peril"

The same innovations that power crypto-assets can also help us regulate them, "she said " To put it another way, we can fight fire with fire. Regulatory technology and supervisory technology can help shut criminals out of the crypto world."


  • Distributed ledger technology (DLT) technology " can be used to speed up information-sharing between market participants and regulators". She added that the technology that enables instant global transactions could be used to create registries of standard, verified, customer information along with digital signatures. Better use of data by governments can also help free up resources for priority needs and reduce tax evasion, including evasion related to cross-border transactions.

  • Biometrics, artificial intelligence, and cryptography can enhance digital security and identify suspicious transactions in close to real time.
The same rules apply to protect consumers in both digital and non-digital transactions. The U.S. Securities and Exchange Commission and other regulators around the world now apply the same laws to some initial coin offerings (ICOs) as they do to offerings of standard securities. This help to increase transparency and alert buyers to potential risks.


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