Bitcoin faces a day of reckoning as oligarchs rush to save their money


“The first time we know it is sometimes when you open their safe and inside there is a [digital] USB drive, containing loads of codes and IDs that you think are linked to crypto-assets,” adds Benton, who now runs consultancy Intelligent Sanctuary

“It’s a huge problem. And very often, the exchanges where the transactions take place are in jurisdictions with very light regulation.

Some crypto exchanges have been criticized for requiring almost no verification from users wishing to transact, including a minority that allows people to act anonymously.

Those concerns were echoed this week by US Federal Reserve Chairman Jerome Powell.

“We have this booming industry that has many parties, and there’s not the kind of regulatory framework in place that needs to be there,” he told US lawmakers.

However, Changpeng Zhao, the boss of cryptocurrency exchange Binance, argued that digital currencies are no more susceptible to money laundering than physical assets such as cash.

He rejected calls for a blanket ban on Russian purchases on exchanges, a measure called for by the Ukrainian government, saying it would only harm ordinary people using the platform for legitimate purposes. Binance performs “know your customer checks” and adheres to sanctions, he added.

Zhao told the BBC: “If people want to evade the sanctions, there are always several methods. You can evade the sanctions using US dollars, using cash, using diamonds, using gold. I don’t think crypto is anything special there.”

There is evidence that law enforcement is already adapting to the challenges posed by Bitcoin.

New York husband and wife Heather Morgan and Ilya Lichtenstein were recently arrested by US authorities in connection with one of the largest cryptocurrency thefts on record: the $4.5 billion Bitcoin heist. stolen from the Bitfinex exchange in 2016.

FBI investigators said they used “good old-fashioned police work” to trace a complex series of transactions to the pair.


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