Crypto is our only hedge against tyranny

As a former “crypto cop” who spent almost a decade fighting crypto-enabled crime at the US Department of Justice, I have seen the ugliest of crypto’s use cases in facilitating some of the most horrific crimes.

But no matter my history, I still believe that distributed ledger technology is the most important information technology innovation of our time. We must protect it at all costs, not only from the bad actors that exploit it, but also from the forces that drive governments to regulate it out of existence.  

“This is why we can’t have nice things” summarizes my sentiment about the criminal use of digital assets, which I truly believe were originally created for the good of humanity. 

As cryptocurrency exploded into the mainstream in the last three years, crypto-enabled crime rates exploded along with it. 

But crypto is not inherently bad. People are bad. 

Just like the street corner claimed by your local drug dealer shouldn’t be burned to the ground just because it facilitates crime, cryptocurrency shouldn’t be ousted out of society because it sometimes is used by bad people doing bad things. 

The development of distributed ledger technology may be the only way to save the world from the devastating consequences of humanity’s historically relentless pursuit of and competition for power and resources, which arguably is the root of all past and present human catastrophes.  

A new, revolutionary standard of money — horribly misused

I first heard of Bitcoin in January of 2012 while watching a The Good Wife episode entitled, “Bitcoin for Dummies.” It immediately piqued my interest, as I was still recovering from having to graduate with my then seemingly useless Ivy League degree in economics facing “crickets” in the job market following the kaboom of the US housing market and the Great Recession that followed.  

To say I was bitter about the situation is an understatement. 

How did the government let this happen? How were the executives from “too big to fail” banks still getting bonuses and golden parachutes, while middle class families and newly graduated students had to pay for it all?   

What dawned on me is that the global economy and the livelihoods of millions of people around the globe hung by a thread on a trust-based system with inherently untrustworthy puppet masters at the helm. 

Enter Bitcoin — a cryptographic peer-to-peer electronic cash system that removes the need for a trusted intermediary in financial transactions. Could it really be true? Did the elusive Satoshi Nakamoto create a new standard of money immune to the human element? It appeared so.  

All of humanity should have been sailing into the sunset with this new human-proof, peer-to-peer global monetary system. No need for gold or central banks, with anti-inflation and scarcity already built into the underlying algorithm. 

I expected otherwise marginalized and unbanked humans to be taking full advantage of this revolutionary standard of money to pull themselves out of the grips of poverty and misfortune. 

The crime revolution begins

I began my career at the DOJ shortly after hearing about Bitcoin and had been initially placed in a money laundering enforcement group. There, I learned all the ways in which large criminal organizations launder illicit proceeds and the investigative techniques used to crack the evermore sophisticated money laundering schemes employed by drug cartels, terrorists and cyber criminals.

What I discovered in my research shocked the conscience. Not only was Bitcoin not being used for its intended purpose, a group of true early adopters quickly emerged — dark web drug traffickers operating online within the confines of dark web markets.

Anonymous platform (TOR, the Silk Road) + anonymous payment system (Bitcoin) = crime revolution!  

The Silk Road quickly became the Amazon of retail drug trade, where you could purchase heroin online using bitcoin from the comfort of your own home without ever stepping foot into the dark alleys of traditional drug trade. Ironically, the US Postal Service would then graciously and unwittingly deliver the said drugs to your doorstep. 

Drug dealers whose business was traditionally confined to a local street corner now had a global customer base of faceless strangers and unlimited potential for growth

The more I learned about Bitcoin and the dark web, the more I became convinced that eventually Bitcoin will be one of the most popular ways to launder money for global crime syndicates, as it allowed for the transfer of value across borders cheaply and instantaneously while not touching the tightly-regulated global banking system. Flash forward 10 years, and my prediction came true. 

As it promises to do, Bitcoin is able to remove the middleman — and doesn’t discriminate on who the middleman is.

Global criminal syndicates shockingly spend 30% on average of their revenue on money laundering with several layers of middlemen, brokers and shell companies involved in the process of funneling money and physically moving illicit cash.

And now drug cartels, terrorist organizations, pedophiles and hostile state actors can use crypto to launder money, removing the middleman and saving that money.

The availability of highly liquid stablecoins on multiple chains also now decreases the volatility risk previously associated with using Bitcoin to launder criminal proceeds. North Koreans and Russians also found crypto to be a saving grace as they successfully evade global sanctions and use zero-day cyber attacks and social engineering exploits to finance their operations. 

Hacks, scams and fraud cases are piling up at unprecedented rates, because crypto made it easier to monetize these types of crimes due to its inherent immutability. Many DeFi projects became a playground for hackers, with their shoddy cybersecurity architecture and poorly thought-out tokenomics. Get-rich-quick ICO fundraising schemes gave rise to countless vaporware projects that ultimately left most investors with nothing. And regulators can’t keep up with the technology fast enough to put controls in place to protect investors.  

I’ve seen all this, and more, in my ten years at the DOJ — and I still know that crypto deserves to be saved. 

Why? 

Because besides surviving the Great Recession, I immigrated to the United States as a kid to escape a tyrannical government and don’t take the freedoms I am afforded in this country for granted. 

I know what it’s like to feel hopelessly dependent on powerful forces in pursuit of power and resources that don’t have mine or my family’s interest at heart. I know what it’s like to find out that the people that pledged to protect me are my biggest enemies. The significance of decentralized and trustless monetary systems may not be apparent for those residing in nations relatively free from authoritarian rule, corruption,and repression. However, I recognize this value and vow never to disregard it. 

Crypto, despite its imperfections, stands as our only hedge against tyranny, and I am committed to dedicating my life to do my part in making sure it transcends the bad actors that exploit it.

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