The crypto industry is supposedly the best environment for all kinds of scammers to work. Superintendent of the New York Department of Financial Services (NYDFS) Adrienne Harris said this at the Crypto Winter Summit event. According to her, the main problem with digital assets is the “anonymity” they offer. Taking this into account, crypto has greatly simplified the transfer of money anywhere in the world and has become an integral part of illegal transactions.

It is important to note that most cryptocurrencies are pseudo-anonymous. This means that anyone can study the balance and activity of any address in the cryptocurrency network using the so-called blockchain browser. Who exactly is hiding behind a certain address in the form of letters and numbers is unknown.

However, if the user somehow reveals himself, then all his actions will be visible. Taking into account this feature, the myth about the popularity of crypto among scammers in general is broken, since criminals do not like the prospect of tracking their every transaction.

There is also an increase in activity among large investors in the coin niche. This is noticeable in the growth in the size of the average transaction in the Bitcoin-USD trading pair on the popular cryptocurrency exchanges Bitstamp, Coinbase and Kraken since September 2023.

How cryptocurrencies are used

Harris described the convenience of crypto for attackers using the example of extortion. Previously, in order for scammers to collect ransom, they had to choose a safe location, have special cash requirements, and so on. Currently, one crypto wallet address is sufficient for this, and transactions in anonymous cryptocurrencies are still extremely difficult to track. According to Harris, the “illegal component” of the digital asset industry has been under the radar of regulators and government agencies for several years.

According to a representative of the New York Department of Financial Services, this was part of a long-term campaign in which it will be necessary to “socialize” crypto companies with regulators. Firms in the field of traditional finance are already aware of all the intricacies of the work, but companies from the crypto industry need to prepare for relations with regulators. Harris says.

We see that business is growing much faster than the ability to comply with regulatory requirements.

Overall, Harris did bring up an important point. The peculiarities of cryptocurrencies make them a popular tool for scammers, but this fact should not discredit the entire industry as a whole. Attackers still use traditional currencies for the majority of their transactions. Cryptocurrency is also not a key component in financing terrorism, since transparent blockchains make it possible to track every transaction and the balances of every available address.