I think it's more difficult than one imagines to ban Bitcoin's linkages to the existing institutional financial system. After all, it's not as if REvil or DarkSide are using Coinbase to trade their Bitcoin. If the United States shuts down all Bitcoin exchanges operating on its territory, but Russia does not, then does that have a meaningful impact on the usage of Bitcoin for cybercrime? It seems to me that all such a step would do is make the positive usages of Bitcoin more difficult while having only a marginal effect on the usage of Bitcoin for cybercrime.
If FinCEN were to take the position that all exchange of Bitcoin to or from other currently were illegal, then there would be at least two major impacts:
1. US people or people in any country that respects FinCEN would have a hard time paying ransoms in Bitcoin, and
2. The value of Bitcoin paid for ransom would go down. What exactly is the criminal holding Bitcoin that is, by the very fact of being Bitcoin, dirty going to do with it? No matter how mixed and laundered it got, it would still be dirty.
At the end of the day, the result would be a lot like trying to extract ransom in the form of Rubles held in a Russian bank. I think this would strongly disrupt the business model.
That is a good point, but we might also end up with yet another layer of criminal organization: "dark exchanges" that allow victims of cybercrime to get cryptocurrency without interacting with the legal financial system. While I would rather that ransoms not be paid at all, if a ransom has to be paid, I'd much rather the company get their cash in a legitimate manner, interacting with financial entities that cooperate with law enforcement, rather than via fences and money launderers.
At some point, companies can just arrange for the transfer of suitcases full of cash. The point is that increasing the friction on these crimes reduces their incidence, and that's a point the author provides evidence for.
Consider there is a war on drugs which has repeatedly proven that "increasing the friction" might actually make the situation worse. Broadly criminalizing any and all exchange of money to unauthorized tokens (any more specific definition of a cryptocurrency will be subverted) is likely to end up in that territory.
Oh I'm sorry. But the point still stands, the article is mistaken that it would require arranging money transfers to outside the U.S. With bitcoin in the mix, it is not true anymore. Sure, you can call the bank but unlike Viagra, scammers don't need one fixed account there.
