Story by Antonio Gomez, photograph by Austen Distel

Within the past month, Turkey has taken action against cryptocurrency. It did so firstly by banning the use of crypto-assets for payments and secondly by placing cryptocurrency trading platforms on lists with terrorism financing regulations. While these precautions taken by the Turkish government caused a fall in cryptocurrency prices, they were just another step being made by governments over the world to counter the increasing threat of malicious funding via crypto currency.

In August of 2020, the United States Department of Justice announced that millions of crypto assets had been seized on the basis that they were associated with a terrorist organization. Over 300 accounts were involved in the largest crypto bust seen to date. But large busts aren’t uncommon either. In 2019, 150 accounts were found to be associated with another attempt to fund terror organizations. Yet even these are just a few examples of many.

The United States has the funding and infrastructure to keep a watchful eye while still allowing autonomy in the market. Yet, for many countries, a similar environment might not seem as immediately realistic, therefore warranting sweeping legislation in its stead. There is a prominent concentration of cryptocurrency bans towards the middle east. Furthermore, cartels in South America have been using cryptocurrency to launder money, prompting even more conversations on the matter in other regions. As countries juggle various domestic and international threats, their drastic legislative actions begin to make more sense. But one thing holds true within this context: the decision to allow cryptocurrency legislation to prioritize either autonomy and privacy or security is one that ought to take the people’s opinions into account.

Cryptocurrency has garnered praise for its ability to enhance privacy as many feel bothered by “surveillance capitalism” wherein private and public entities gather personal information through transaction histories. Challenging such a structure has its value and is often appreciated for its direct competition to large corporations that profit off the selling of personal information. There seems to be a legitimate sense of comfort that some gain from this separation that shouldn’t be understated. The case for cryptocurrency extends to socioeconomic mobility as well. Outright bans of the currency have barred many from collecting gains from their assets, limiting personal economic development.

Yet, in terms of promoting security, regulating cryptocurrency has proven effective at protecting governments’ own national currencies, at least in the short term. “According to an excerpt from Chainalysis’ 2021 report, in 2019, criminal activity represented 2.1% of all cryptocurrency transaction volume (roughly $21.4 billion worth of transfers). In 2020, the criminal share of all cryptocurrency activity fell to just 0.34% ($10.0 billion in transaction volume)” (Forbes 2021). The general trend seems to be that governments are getting better at cracking down on criminal activity with respect to cryptocurrency and will continue to do so.

However, such extensive economic regulations often come with little input from the general public. The trend from 2019 to 2020 indicates that there is a genuine benefit to governmental influence in the dealings of cryptocurrency, but the best way to prevent long term corruption and uphold the will of the people is to give the public a say in their own finances before outright bans consume their cryptocurrency assets.