In brief
- Glenn Hutchins of Silver Lake said cryptocurrency’s primary use is not for crime.
- According to him, critics ignore the immutable nature of blockchain technology.
- His view is supported by a recent study by Chainalysis.
Glenn Hutchins, co-founder of global technology investment firm Silver Lake, has brushed off the conventional assumption of Bitcoin being primarily used for criminal activity such as money laundering, fraud and tax evasion, according to FinExtra.
Speaking at Davos 2021, which this year is taking place in virtual format, he reportedly stressed that those saying that cryptocurrency is the preferred tool for criminals usually ignore the immutability of blockchain, its underlying technology.
“In the US, 80-90% of $100 dollar bills are used for organized crime and tax evasion and there’s a very good reason for that—they're untraceable and fungible,” said Hutchins.
“Bitcoin, however, leaves a permanent, unalterable record, hence why almost all criminals using it are caught. It is fundamentally wrong to say that Bitcoin is mostly used for crime.”
Silver Lake is a global technology investment firm, with approximately $75 billion in combined assets under management.
One of the high-profile figures to make statements about Bitcoin’s use for illegal activities is Janet Yellen, the newly-appointed chair of the US Treasury.
However, a recent study by blockchain analytics firm Chainalysis contradicts such statements. According to the firm’s 2021 Crypto Crime Report, the criminal share of all cryptocurrency activity fell to just 0.34%, or $10.0 billion in transaction volume.
At the same time, the report suggested that crypto payments associated with ransomware were on the rise last year, while the vast majority of the overall illicit crypto transactions were related to darknet markets and the general category of “scams.” But for now, still a drop in the bucket.