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Morningstar Clears Slate on Crypto Being “Criminal Currency” – Crypto News

Published

2 years ago

January 24, 2024

Dripp

The backlash for crypto has been in place ever since its creation in 2009. Allegations related to digital assets being involved in illicit activities have been the topmost concern for markets globally. Brokerage Morningstar, however, holds a different opinion, saying that most individuals are unaware of just how transparent this procedure is.

Criminals are better off using cash

Understandably, Bitcoin would appeal to ordinary investors weary of the established financial industry. However, the startling volatility of cryptocurrencies and their illicit overlap are only two reasons to exercise extreme caution.

However, a recent Morningstar report highlights how the entire world might have misunderstood the discrete nature of crypto. The report has been compiled by taking into account the opinions of analysts and college professors who have detailed knowledge about digital assets and their impact on the larger masses.

Morningstar explains that a crypto transaction cannot be undone with many platforms. You can’t always tell who is using it once it’s finished.

Usually, this secured nature of a blockchain transaction is where the allegations about criminal activity are levied. Because of its appeal to organized crime and dark web actors, Bitcoin has been dubbed the “criminal currency”. But according to Morningstar, most individuals don’t realize how transparent this procedure is.

The report clarifies that criminals used to use crypto, but now one can leave a permanent audit trail if so desired.

“You’re in serious trouble if someone manages to identify the owner of the wallet. You would be better off utilizing cash if you were planning to commit a crime”, Morningstar adds in its report.

Decentralized crypto harder to regulate, says Morningstar

Crypto’s biggest selling point so far has been that it is decentralized. Investors who are attracted to the digital currency market want to stay away from central banks’ control over their assets.

However, Morningstar says that the fact that cryptocurrency assets are based on self-validating blockchains makes regulating them difficult. Additionally, the brokerage believes that crypto will never be as effective as a more centralized intermediate.

Morningstar’s report also sheds light on the fact that the competitive advantage for companies in the cryptocurrency market lies in their decentralized nature. Many companies have been able to dodge a lot of regulation thus far by persuading regulators that this is something novel and distinct that does not fit under central banks.

Rising regulation on crypto markets

Crypto has long been a section of the financial market that didn’t have centralized regulations. However, that has been changing recently.

Crypto-asset service providers (CASPs) are now covered by the European Banking Authority’s (EBA) broader anti-money laundering (AML) and counter-terrorist financing (CTF) standards.

Previously, Indian officials have sent a show cause notice and warned nine cryptocurrency exchanges—Binance, Kucoin, Huobi, Kraken, Gate, Bittrex, Bitstamp, MEXC, and Bitfinex—for breaking registration regulations.

The Treasury Department of the United States also has released extensive instructions for the filing of bitcoin taxes. Cryptocurrency brokers must now notify the Internal Revenue Service (IRS) of any new information on user sales and transfers of digital assets.

The partial regulatory control over the crypto markets is still a bitter-sweet aspect of its trading. However, now with the Spot ETFs also getting a green signal, it seems like more regulatory control could spur into the market in the future.