Crypto, Crime, and the Future of Finance

Welcome back to CypherTalk Weekly. Today we’re diving deeper into the fascinating and often misunderstood world of cryptocurrency. If you listened to Episode 2 of the podcast, you already know we had a thought-provoking conversation with Ari Redbord, Global Head of Policy at TRM Labs.

I don’t need to highlight the skyrocketing price of bitcoin (at time of writing, up 35.61% in the last month) to underscore our obsession with crypto these days. But it’s more than just an investment opportunity—cryptocurrencies are built on a technology, blockchain, which enables faster, cheaper $$$ transfers—and potentially more transparency. Banks are interested. So are criminals.

Ari is an expert on blockchain security and financial crime. He spent years in the U.S. Department of Justice and Treasury chasing down bad actors, and now he’s doing it in the crypto world. Our chat covered everything from how criminals exploit crypto to why regulation is essential for its future. Here’s a closer look at what we discussed—and what it means for all of us.

Is crypto really a criminal's playground?

One of the first things Ari cleared up was this idea that crypto is a criminal’s dream tool. It’s not entirely true. “Criminals use crypto, but they also use cash, real estate, and even art to commit crimes,” he explained. “Crypto just gets more attention because it’s new and flashy.”

In fact, traditional finance—like use of cash or “fiat”—is still the primary tool for crime. Reports from the U.S. Treasury and EUROPOL back this up. Whether it’s money laundering, fraud, or scams, fiat-based systems are used far more often than cryptocurrency.

But what makes crypto unique is its transparency. Blockchain records every transaction in an immutable, public ledger. That means authorities can trace funds in ways they never could with cash. “It’s a paradox,” Ari said. “Criminals love the speed of crypto, but the same system makes it easier for us to catch them.”

One of the most fascinating (and alarming) parts of our conversation was about North Korea’s use of crypto. Ari described how state-sponsored hackers are targeting DeFi platforms and exchanges to steal cryptocurrency.

Their methods are incredibly advanced. They research their targets, build fake profiles, and impersonate industry professionals with fluent technical language. Once they’ve gained trust, they deliver malware to access networks and steal funds. “These actors are sophisticated,” Ari warned. “Even people well-versed in cybersecurity can fall victim.”

North Korea’s stolen crypto isn’t just sitting in a vault somewhere. It’s being used to fund weapons programs and other destabilizing activities. This raises serious national security concerns, and it’s a reminder of why the crypto industry needs better protections against cyber threats.

Regulation: A tug-of-war

In the U.S., regulation remains a hot mess. Right now, there’s no clear framework for how cryptocurrencies should be governed. Agencies like the SEC have focused on enforcement, but that’s not enough. “The problem,” Ari pointed out, “is that companies don’t know what the rules are. That uncertainty is driving innovation overseas.”

Compare this to places like Europe, which recently introduced MiCA (Markets in Crypto-Assets). MiCA provides clear guidelines for crypto businesses, balancing consumer protection with innovation. The result? Europe is becoming a hub for crypto development while the U.S. risks falling behind.

But change could be coming. With Donald Trump returning as President, the SEC’s leadership could shift. A new chair might prioritize creating rules tailored to crypto instead of applying outdated financial regulations. This could keep innovation in the U.S. while ensuring the industry operates responsibly.

Why does this matter?

Let’s talk about why all of this matters to you. Cryptocurrency isn’t just for investors or techies. It’s shaping the future of finance—and that future will affect everyone.

1. Payments: Imagine paying rent or splitting dinner bills with Bitcoin or stablecoins. It’s fast, easy, and doesn’t rely on traditional banks.

2. Access to Finance: Crypto can help people in underserved regions access financial tools they’ve never had before, like wallets and payment systems. It’s a game-changer for financial inclusion.

3. Savings and Investments: Stablecoins (crypto tied to real-world assets, like the U.S. dollar) offer a way to save without the wild swings of Bitcoin. They’re like digital dollars but faster and more transparent.

Still, there are risks. Scams are a real concern, and crypto’s volatility can make it intimidating. We’re still in the early days of crypto. But the more we learn about it, the more we’ll see its potential—and its limits.

Crypto isn’t going away. If anything, it’s becoming more integrated into everyday life. But for it to truly succeed, a few things need to happen:

• Better Education: People need to understand how crypto works, including its risks and benefits.

• Stronger Security: Tools like those built by TRM Labs are essential for keeping bad actors out of the system.

• Clearer Regulation: Governments need to create rules that protect consumers while fostering innovation.

Ari ended our conversation on a hopeful note. “Bad actors are always early adopters,” he said. “But as more lawful users join, crypto will become safer, more mainstream, and more useful for everyone.”

Takeaways

1. Fiat fuels more crime than crypto, but crypto’s transparency makes it easier to catch criminals.

2. North Korea’s cyber tactics are a wake-up call for the industry to improve security.

3. Clear regulation is critical. Without it, the U.S. risks falling behind.

4. The future of finance is a mix of crypto and traditional tools. Start learning now—you’ll be using it sooner than you think.

Missed the podcast? Catch Cypher Talk Episode 2 (on Spotify and Apple Podcasts) for more insights from Ari Redbord. And stay tuned—we’ve got more on the way!

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Any thoughts, ideas, suggestions? Send them my way to [email protected]. Have an awesome weekend. /m