Georgetown Law adjunct professor Timothy Massad said that it is crucial to remember that no financial system will ever be completely "risk-free" when balancing technological innovation with risk management. He shared this perspective on the Lunch Hour podcast on December 16.
"We're not ever going to have a risk-free system, and we should not be trying to achieve that," said Massad. "I think that's important to remember. We have to look at the benefits of the technology in this particular case, the benefits of being able to move value, potentially very quickly and efficiently."
According to the Chainalysis 2024 Crypto Crime Report, the total value received by illicit cryptocurrency addresses in 2023 was $24.2 billion, a decrease from $39.6 billion in 2022. The share of all crypto transaction volume associated with illicit activity also fell from 0.42% to 0.34%. These reductions highlight the effectiveness of proactive security measures in the industry, as noted in the report.
The University of Western Australia's Dr. Andrzej Gwizdalski compiled data from the United Nations, World Economic Forum, and blockchain analytics firm Chainalysis. Gwizdalski reported that "Traditional fiat, like the USD, is implicated in an estimated $3.2 trillion in illegal activities annually—over 100 times the $20 billion linked to cryptocurrencies, according to UN, WEF, and Chainalysis," according to a post from Oodaloop. He further said that "Using crypto for illegal purposes is inherently risky and plainly unwise with every transaction transparently recorded."
Massad previously served as chairman of the U.S. Commodity Futures Trading Commission (CFTC) from 2014 to 2017 and as Assistant Secretary for Financial Stability at the U.S. Treasury Department, according to Brookings Institution. He is currently a nonresident senior fellow at Brookings and a research fellow at Harvard University's Kennedy School of Government.