Criminals Drop Bitcoin for Monero

Mike Mish Shedlock

Criminals now prefer Monero over Bitcoin because Bitcoin can be traced.

Bloomberg reports the Criminal Underworld Is Dropping Bitcoin.

Bitcoin is losing its luster with some of its earliest and most avid fans -- criminals -- giving rise to a new breed of virtual currency.

Privacy coins such as monero, designed to avoid tracking, have climbed faster over the past two months as law enforcers adopt software tools to monitor people using bitcoin. A slew of analytic firms such as Chainalysis are getting better at flagging digital hoards linked to crime or money laundering, alerting exchanges and preventing conversion into traditional cash.

The European Union’s law-enforcement agency, Europol, raised alarms three months ago, writing in a report that “other cryptocurrencies such as monero, ethereum and Zcash are gaining popularity within the digital underground.” Online extortionists, who use ransomware to lock victims’ computers until they fork over a payment, have begun demanding those currencies instead. On Dec. 18 hackers attacked up to 190,000 WordPress sites per hour to get them to produce monero, according to security company Wordfence.

For ransomware attacks, monero is now “one of the favorites, if not the favorite,” Matt Suiche, founder of Dubai-based security firm Comae Technologies, said in a phone interview.

In monero’s case, criminals are snapping it up because bitcoin’s underlying technology can work against them. Called blockchain, the digital ledger meticulously records which addresses send and receive transactions, including the exact time and amount -- great data to use as evidence. Match an address to a crime and then watch the bitcoin universe carefully, and you can see the funds disappear and reappear in other locations.

Started in 2014, monero is very different. It encrypts the recipient’s address on its blockchain and generates fake addresses to obscure the real sender. It also obscures the amount of the transaction.

The techniques are so potent that software that flags coins suspected of being obtained through crime now tags just about anything converted into or out >of monero as high risk, according to Pawel Kuskowski, chief executive officer of Coinfirm, which helps exchanges and other companies avoid tainted money. That compares with only about 10 percent of bitcoin, he said.

Two Uses of Bitcoin

  1. Money laundering or other criminal activity
  2. Speculation

Those riding point number two are highly dependant on the Greater Fool whether they realize it or not.

Of course, this is precisely the market the Fed and Central banks have created.

Of the legal transactions, from equities to junk bonds to Bitcoin, It's all speculation now.

Mike "Mish" Shedlock

Comments (6)

Unless the bitcoin maintainers shift their focus towards enabling anonymity, the currency will die, as more and more people realize everything they do is essentially public.

No. 1-6

If someone were to offer to pay me in crypto currency i would demand more versus dollars because of the limited ability to spend it and fear of being branded a criminal. I have a difficult time believing anyone would view a crypto-currency as being worth more than a gov't issued one.


and you can't pay taxes in crytpo-currencies


Bitcoin is an alternative to government fiat currency in a world with few other options. Saying bitcoin was used primarily for criminal activity is classic fake news. When the website silk road went down, it didn't impact bitcoin very much at all. People love to paint bitcoin as a bubble (which is likely is) but as pointed out above, there are many bubbles today. If bitcoin can get it's issues resolved (speed, cost, etc.) maybe it will continue to dominate the crypto space.


The one goal in buying/receiving Bitcoin is to SELL it for dollars. It's not an "alternative" to dollars, it's a means to acquire dollars.


But would your additional demand amount to more than the 40%, and ever rising, lopped off the top in taxes, fees, regulatory nonsense etc. that accompanies non-anonymous transactions?

As well as the added risk of being sent to jail, in an era where “crime” is really just shorthand for “withholding anything at all from crass theft by those well-connected?”

In China, people were/are taking big losses minting Bitcoin, as the exchanges have been banned, person to person is risky, yet people value Bitcoin more than the supposedly equivalent sum in fiat. Simply because BTC makes crass theft of their stuff at least slightly harder to perpetuate. And it’s not as if “we” are somehow diiiiferent, ouside of the childish imaginations of those with greater exposure to the American versus the Chinese indoctrination apparatus.

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