Cryptocurrencies in the hands of rogue countries—risks for cryptocurrencies?

[tabas]

Strict countries might reason those out for them to get stricter with the compliance for the genuine businesses that are related to crypto like the casinos and exchanges. And that will also enforce more strict protocols that they might require for the users of these businesses. I think that it's unfair that they only look to Bitcoin or to the actuality of the crypto market if they're like that. Fiat, local cash transactions are even more rampant with those matters but for the other countries to control border transfers and don't want to receive funds from those negative sources, they'll have to do it and we're the ones that will be affected by that.

That is true, fiat or crypto, if the country would want it to use it to something damageable to others, they will. The reason why the bad aspect is being highlighted to crypto is because people are magnifying its role in some illegal acts. Whereas, even before crypto was born, fiat was already part of this scheme.

It all started from Bitcoin, to where it has been mostly used before and that's the dark market places. That impression was never gone but it has been long time ago. And cash is also used in those places and are still being used. They're biased because they see that it's making sense and the people are liking the decentralization that it possesses. Instead of adopting it freely and having no problems at all, they're making it hard for themselves and for the people.

[coolcoinz]

The deal is, you are either a libertarian or authoritarian and this situation that OP is pointing out is one where the line between the two groups has to be drawn.

Being a libertarian, I'm against what some countries like the EU are doing to Russian assets. One day they've decided that since Russia attacked Ukraine they will steal all money belonging to Russian citizens.
I'd like Ukraine to win here, but people who run a business in their home country can't be made responsible for war their president wages. If you start deciding whose money you can take based on what citizenship they have, you're only showing that money isn't safe under your protection. That you're not to be trusted. Therefore, I'm completely fine with people choosing bitcoin over fiat and using it to move wealth across borders as a reaction to what these countries are doing.

IMO bitcoin is for everyone. If someone from Iran wants to use it, why shouldn't he? Also, is Iran so bad? What about Israel? Are we completely fine with them using bitcoin, but not Iranians, Palestinians or Russians?

[WillyAp]

Let’s be honest it is not surprising seeing bitcoin or crypto been used mostly for money laundering and some of this bad things like that and I usually say to people that this is not about bitcoin but rather about the nature of person. Even if Dollars currency or any other currency has the advantage of it like the bitcoin own then they will still be laundering same currency again.

Most Crypto is used legit.
Similar to the US$,the €, pound, Gold,Diamonds who also are used in illegal activities. More of them are legit.
Crypto has one ingredient which makes it attractive. Its digital.
Legal and illegal is question of a state outlawing something.

[DrBeer]

Today, North Korea, Iran, Russia, and other similar countries/regimes actively use cryptocurrencies to circumvent sanctions, withdraw or attempt to hide criminal assets, and for other illegal transactions.

Nobody can circumvent sanctions using cryptocurrencies. Take Russia for instance. They are under US regime's sanctions, that means they cannot trade with the US and its slave countries. Even if they use a different means of payment like cryptocurrencies, they still won't be able to find anybody in the Western bloc to trade with.
Conversely Russia is trading with the civilized world as part of the BRICS which is now more than 60% of the world and they don't need cryptocurrencies to do that. There are various means of payment in effect from the Russia's own SWIFT alternative and China's new digital Yuan all the way to various dual-trade agreements that help trade internationally.

However, you have some good points here. We have seen in the past NATO regimes, specifically the US regime has used cryptocurrencies (specifically Tether) to fund various terrorist organizations around the world. Terrorist proxies they use to destabilize other nations. This is a risk that cryptos pose specially in the hands of corrupt regimes like the US.
Eventually this is going to bring a lot more restrictions in the civilized world, and specifically in countries that are the victims of such terrorist groups funded by the US regime so that these dirty funds can be tracked and the terrorist cells that US has built can be found and dismantled.
Luckily the US regime is still using transparent cryptos (not so much anon-coins) which makes finding the US backed terrorist cells easier.

1. The country of international terrorism, Russia, has no slaves; it is itself a slave to China, and apparently to Iran and North Korea as well.
2. They actively use cryptocurrencies, as this allows them to avoid legal sanctions from the developed world and the blocking of payments to terrorists through SWIFT and other mechanisms for legitimate participants.
3. A pathetic attempt to create “their own token” tied to the absolutely non-convertible ruble currency,  stablecoin A7A5 - isn't this an attempt to use technology to circumvent well-deserved sanctions?

PS Dear pooya87, I have known your mental state for a long time and well, and I have a request—please don't throw around your sickening fakes about “the US financing terrorism”—don't put your diagnosis on display

[Hewlet]

As we know, many countries with questionable regimes (terrorists, totalitarian and others) use cryptocurrencies for their dirty deeds, and very often to circumvent sanctions that have been logically imposed on them.

This happens solely because of the anonymous nature of holding crypto where criminal assume that by carrying out heir dealings using bitcoin that they stand safe from being easily traced. just like any other kind of asset that gets abused by criminals, bitcoin to an extent suffers same fate but that alone is not enough to compel for greater restriction. some crypto are legit used to do the right things when it is used by the right set of individual and the reverse is the case when it get into the wrong hands. same is application to the usage of the fiat and banks for criminal activities.

In most African decent for instance , fiat is still being used to carry out exchange for ransom even when it is traceable. that is a vulnerability that is still prevelent but yet, fiat is still a big deal as long as it usage as a medium of exchange is concerned.

[DrBeer]

As we know, many countries with questionable regimes (terrorists, totalitarian and others) use cryptocurrencies for their dirty deeds, and very often to circumvent sanctions that have been logically imposed on them.

It's a bit funny, but about 10 years ago, we used to read stories about how cryptocurrencies were used by terrorists, drug traffickers, and all other "underground" dealers. And now some governments are using them for the same purpose?

Well, I guess we can agree that crypto made a lot of progress... when you evolve from "street" to "international & government involved" business, there is something in it.

Nothing has changed, only the scale has changed. Previously, terrorism was carried out by groups, but now it is carried out by certain countries that have fallen under the pressure of totalitarian regimes. There used to be terrorist groups, now there are terrorist regimes and countries. The scale has changed. But the very possibility of using any good solution for bad purposes is a characteristic of humanity in general. No matter how good and useful something we invent may be, someone is bound to use it for evil purposes... The dualism of our human world

[Findingnemo]

Just wanted to mention, all these illegal things will become legal if the government decides to pass a new order and remove the sanctions on these countries, so how can these small controls dictate what the majority of people should do and can't?

Is Bitcoin against that censorship, right?

[DrBeer]

As we know, many countries with questionable regimes (terrorists, totalitarian and others) use cryptocurrencies for their dirty deeds, and very often to circumvent sanctions that have been logically imposed on them.

This happens solely because of the anonymous nature of holding crypto where criminal assume that by carrying out heir dealings using bitcoin that they stand safe from being easily traced. just like any other kind of asset that gets abused by criminals, bitcoin to an extent suffers same fate but that alone is not enough to compel for greater restriction. some crypto are legit used to do the right things when it is used by the right set of individual and the reverse is the case when it get into the wrong hands. same is application to the usage of the fiat and banks for criminal activities.

In most African decent for instance , fiat is still being used to carry out exchange for ransom even when it is traceable. that is a vulnerability that is still prevelent but yet, fiat is still a big deal as long as it usage as a medium of exchange is concerned.

The example you gave (ransom ) is a local process and its volume is very small compared to interstate transactions or large deliveries to the country, for example, of strategic resources or technologies. And for “small transactions,” cash is a simple and convenient method of closing a “deal.”
 For global transactions, cash is an extremely inconvenient resource. If the transaction is worth tens of billions of dollars, imagine how much money that would be physically, and how to solve the issue of safely delivering that money to the seller. Cryptocurrency solves such issues very simply.

[Sticky Bomb]

What do you think—will we face even more inconveniences in the future due to new, forced mechanisms and increased control over the use of cryptocurrencies?

Of course it's expected, government of countries would always try out new stunts on controlling the usage and propagation if cryptocurrency in their various regions, including coordinated regulations by different governments, Bitcoin has always survived and would continue to survive their antics. Don't be surprised that these quantum computing hypes are government ways of scaring people from going into Bitcoin by making them see it as unsafe, and projecting gold and other centralized vehicles as more reliable.

Terrorism financing has been in place long before Bitcoin came on board, Fiat money laundering is busted steadily but it isn't hyped like that associated with Bitcoin, so these noises aren't entirely about Bitcoin being involved in terrorism financing or scams but a direct attack on the decentralized nature of Bitcoin.

[Darker45]

Of course. That's expected, especially now that crypto is already starting to become a mainstream technology. The price to pay for adoption is regulation. Regulation is associated with control. Although Bitcoin itself can't be controlled by the government, it's use, conversion, access, and whatnot could easily be made inconvenient by the government.

This is the reason why sometimes it's confusing which should be preferred: adoption, getting into the mainstream, or remaining as an underground currency.

[Fortify]

As we know, many countries with questionable regimes (terrorists, totalitarian and others) use cryptocurrencies for their dirty deeds, and very often to circumvent sanctions that have been logically imposed on them.

Today, North Korea, Iran, Russia, and other similar countries/regimes actively use cryptocurrencies to circumvent sanctions, withdraw or attempt to hide criminal assets, and for other illegal transactions. We understand perfectly well that sooner or later this will lead to stricter control of cryptocurrency transactions on exchanges, crypto exchanges, and other resources where cryptocurrency is used. The purpose of these actions is to block the circumvention of sanctions, the financing of terrorism, the purchase of weapons for terrorist organizations, and the financing of illegal organizations. In other words, the objectives are correct, legitimate, and positive. However, all these control mechanisms are large-scale, which means that they directly or indirectly affect us, ordinary cryptocurrency users.

What do you think—will we face even more inconveniences in the future due to new, forced mechanisms and increased control over the use of cryptocurrencies?

This might actually be one of the things to cause the downfall of bitcoin or cryptocurrency in general - if they can pin enough evidence that it is rewarding countries like North Korea or effectively allowing them to circumvent restrictions on financial networks. At present it's been abused on a relatively small scale to avoid sanctions, but gambling companies and exchanges are certainly major targets for hackers from these countries. For a country like North Korea with a fairly small economic base, it can be a sizable source of income.

[DrBeer]

What do you think—will we face even more inconveniences in the future due to new, forced mechanisms and increased control over the use of cryptocurrencies?

Of course it's expected, government of countries would always try out new stunts on controlling the usage and propagation if cryptocurrency in their various regions, including coordinated regulations by different governments, Bitcoin has always survived and would continue to survive their antics. Don't be surprised that these quantum computing hypes are government ways of scaring people from going into Bitcoin by making them see it as unsafe, and projecting gold and other centralized vehicles as more reliable.

Terrorism financing has been in place long before Bitcoin came on board, Fiat money laundering is busted steadily but it isn't hyped like that associated with Bitcoin, so these noises aren't entirely about Bitcoin being involved in terrorism financing or scams but a direct attack on the decentralized nature of Bitcoin.

Regarding the risks associated with quantum computing, I disagree, as this is a potential and high risk for blockchains based on pre-quantum cryptographic algorithms. It is sufficient to study their concept and features.
I agree that terrorism financing existed before this. But blockchain, like any useful invention of mankind, will always be used by people for illegal activities. The problem is that it is more difficult to block this mechanism.

[Alpha Marine]

If you are talking about bitcoin, then it is censorship resistant and nobody can control who should or shouldn't use it. As for other cryptocurrencies that are centralized, like stablecoins for example, the authorities have strong control over them and their issuers can even freeze it in any wallet it is stored.

Even with Bitcoin, it's not as easy as people say. The transactions between rogue nations or terrorist groups are usually very large transactions and are visible on the blockchain. To me, I feel it's even more transparent than fiat. You can see that money moved from one address to another address, and when it's a ridiculously large amount, authorities will be interested. They have their ways of flagging such transactions.
The way people talk about bitcoin being used for illegal things is as if it's impossible to trace. Terrorist have been funding their operations from the beginning; they didn't just start after the invention of Bitcoin, and Bitcoin didn't make it easier either.
I feel it's easier to fund terrorism with other means than it is with Bitcoin. There is a reason drug cartels, sex traffickers and terrorists don't use bitcoin as their major means of laundering money.

[WillyAp]

But blockchain, like any useful invention of mankind, will always be used by people for illegal activities. The problem is that it is more difficult to block this mechanism.

True and you need a thief to catch a thief. So governmental oversight is not able to catch someone.
Many societies have forgotten (that you need a thief to catch a thief).

[DrBeer]

If you are talking about bitcoin, then it is censorship resistant and nobody can control who should or shouldn't use it. As for other cryptocurrencies that are centralized, like stablecoins for example, the authorities have strong control over them and their issuers can even freeze it in any wallet it is stored.

Even with Bitcoin, it's not as easy as people say. The transactions between rogue nations or terrorist groups are usually very large transactions and are visible on the blockchain. To me, I feel it's even more transparent than fiat. You can see that money moved from one address to another address, and when it's a ridiculously large amount, authorities will be interested. They have their ways of flagging such transactions.
The way people talk about bitcoin being used for illegal things is as if it's impossible to trace. Terrorist have been funding their operations from the beginning; they didn't just start after the invention of Bitcoin, and Bitcoin didn't make it easier either.
I feel it's easier to fund terrorism with other means than it is with Bitcoin. There is a reason drug cartels, sex traffickers and terrorists don't use bitcoin as their major means of laundering money.

The blockchain is open, and yes, it can be tracked. But:
- it is impossible to identify the sender and recipient
- it is impossible to block a transaction
As a result, we have an uncontrollable payment system. I don't think such users pass the KYC

[Z390]

As we know, many countries with questionable regimes (terrorists, totalitarian and others) use cryptocurrencies for their dirty deeds, and very often to circumvent sanctions that have been logically imposed on them.

Today, North Korea, Iran, Russia, and other similar countries/regimes actively use cryptocurrencies to circumvent sanctions, withdraw or attempt to hide criminal assets, and for other illegal transactions. We understand perfectly well that sooner or later this will lead to stricter control of cryptocurrency transactions on exchanges, crypto exchanges, and other resources where cryptocurrency is used. The purpose of these actions is to block the circumvention of sanctions, the financing of terrorism, the purchase of weapons for terrorist organizations, and the financing of illegal organizations. In other words, the objectives are correct, legitimate, and positive. However, all these control mechanisms are large-scale, which means that they directly or indirectly affect us, ordinary cryptocurrency users.

What do you think—will we face even more inconveniences in the future due to new, forced mechanisms and increased control over the use of cryptocurrencies?

How is this even possible because all transactions on the blockchain is transparency, the only way they can get away with this is by using mixers, this is why I don't like mixers, it is very useful for me but what about people like ones you are talking about?
It is scary and I would rather not have access to mixers then see people hurt the innocent people this way. Although I still find this hard to believe but anything is still possible.
North Korea crimes are on higher level, they are almost impossible to caught in the acts, they are a bigger threat among all the countries that's available in the world, I fear them the most.

[jostorres]

The blockchain is open, and yes, it can be tracked. But:
- it is impossible to identify the sender and recipient
- it is impossible to block a transaction
As a result, we have an uncontrollable payment system. I don't think such users pass the KYC

KYC is not even required here to be honest as anyone can create a wallet in just a few clicks and start sending or receiving cryptos. With bitcoins, there is actually no way to block a transaction because everything will be published on the network and it is even quite difficult to identify such transaction as there are multiple of ways like mixers to simply mix the funds and hid the source.

Even if the transaction is large as stated by Alpha Marine, the transactions could always be broken into smaller parts to make it look usual just by spending a couple of extra dollars in fees for multiple transactions which I am sure these organizations will be easily be able to afford. With bitcoins, it is almost impossible to stop these transactions and I feel like this is the reason why cryptos are not fully legalized in a lot of countries.

[Hamza2424]

What do you think—will we face even more inconveniences in the future due to new, forced mechanisms and increased control over the use of cryptocurrencies?

You name the ones that have other sources of moving funds, and you did not mention many countries but bro you are right, these countries use crypto for bad work and using tools to do that is what making the growth of these tools uneasy, although if it has anything to do with the cryptocurrency, then it would have done already.

We are seeing regulatory frameworks made to support these governments and are totally not in favor of us.

We will face more inconveniences in the future as AI is not evolving and we are seeing new kind of viruses with the more adoption we will definitely see more restrictions too.

[Forsyth Jones]

I think countries will keep a close eye on transactions to try to collect taxes from citizens and have greater control over money, because money is a way of enslaving people. But deep down, I think those who hold Bitcoin do not care much about that, transactions will continue to happen whether the state likes it or not.

Of course. That's expected, especially now that crypto is already starting to become a mainstream technology. The price to pay for adoption is regulation. Regulation is associated with control. Although Bitcoin itself can't be controlled by the government, it's use, conversion, access, and whatnot could easily be made inconvenient by the government.

This is the reason why sometimes it's confusing which should be preferred: adoption, getting into the mainstream, or remaining as an underground currency.

Meanwhile, the socialist republic of brazil has launched three bizarre, poorly drafted resolutions that will practically kill national exchanges, as they will no longer be viable to use.

One example of the absurd regulations they want to impose on their citizens is reporting all withdrawals from self-custody wallets, requiring the user to identify the destination address (similar to AOPP).

With this, the brazilian government wants to keep all data centralized in its hands: name, identity, transactions, and other data. All it takes is for this data to leak and end up in the hands of criminals.

The pretext is the same as always: to combat money laundering and terrorism, but the real intention is to have absolute control and collect increasingly more taxes.

But how will they ensure compliance with these rules? Given that the user can report true data and then easily clear the KYC using privacy services?

The funny thing is that there's no way they can guarantee the law will be enforced, because naturally people will opt for more privacy; after all, that's what we use Bitcoin for.

[wiss19]

Even now there are some really strict regulations when it comes to exchanging cryptocurrencies and I think that the reason mentioned by you might just be one of them. Not only rogue countries but also terrorist organizations use cryptos to make anonymous payments for purchasing weapons or money laundering. This has been going on since years now and there is nothing much we can do to really stop it.

Even if the exchanges regulate the crypto transactions, it will still be quite difficult to identify the origin of funds and these organizations will also not risk exchanging their cryptos on any regulated exchange instead they will look for a offline source to offload their cryptocurrencies.