US Secret Service (USSS) agent Tate Jarrow alleged that bitcoin and other digital currencies are mostly used by criminals, according to a recent report by Buy-Side Technology.
Jarrow has witnessed his fair share of digital currency use for criminal enterprise. Last October, he received the Secretary’s Exceptional Service Award from the Department of Homeland Security for his leadership in the Liberty Reserve investigation. Liberty Reserve was one of the largest marketplaces for illegal contraband, employing an internal system of digital “Liberty Resverve dollars/euros”. It was shuttered, and its operators were arrested, in a coordinated international operation in 2013.
Speaking at the OpRisk North America Conference, he referred to Liberty Reserve and Silk Road. He went as far as to argue that the main purpose of digital currency is to facilitate illicit commerce, arguing:
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“They [cybercriminals] want to use anonymous currency that allows them to do transactions, move large amounts of money, without ever being traced. That’s why digital currency is very important. It’s used for all this bad stuff.”
Such a scale of criminal enterprise, he argued, could not be facilitated by services like PayPal, which employs a thorough anti-money laundering regimen.
Governments and financial authorities have for long highlighted such risks of digital currencies, but have usually stopped short of alleging that such is their raison d’être.