According to a white paper by the law firm, most money laundering is committed through Bitcoin and fiat currencies
A new whitepaper, published by US law firm Perkins Coie, revealed that privacy coins, such as Monero, Dash, Grin and Zcash do not pose as much risk in terms for money laundering compared to other digital currencies.
According to the whitepaper, the numerous anti-money laundering (AML) measures taken by regulatory agencies all over the world have done enough to curb issues caused by privacy coins. Hence, additional oversight of the privacy coin sector is not needed at the moment, Perkins Coie argued.
Existing AML regulations covers privacy coins
To prove its point, Perkins Coie cited coins that are in line with the current regulations by the New York Department of Financial Services (NYDFS), Japan’s Financial Services Agency (FSA), the US Financial Crimes Enforcement Network (FinCEN), the Financial Action Task Force (FATF) and the UK’s Financial Conduct Authority (FCA).
These agencies have sufficient regulations against privacy coins, which makes the coins less risky compared to other cryptocurrencies.
Perkins Coie goes on to add that not only does privacy coins pose lower AML risk, they also provide public benefits that are higher than their risks. The whitepaper added that the existing AML regulations all over the world sufficiently and adequately cover the risks posed by privacy coins and also provide a proven framework for fighting money laundering and other related crimes.
The whitepaper argued that while most transactions made with cryptocurrencies are legitimate, the benefits provided by privacy coins are substantially higher than the risks they pose to the financial world. The law firm revealed that Bitcoin (BTC) accounts for more than 90% of the addresses used in darknet markets. This is exceptionally high compared to just 0.3% for Monero (XMR), Zcash (ZEC) and Dash (DASH) combined.
Following these revelations, Perkins Coie concluded that the key takeaway from their research is that privacy coins don’t pose an inherent AML risk that is uniquely or unmanageably high. Privacy coins are better than traditional fiat currencies in that they still provide some form of transfer record. Most money laundering activities go unnoticed because fiat and traditional currencies can cross a border without any trace.