Yet another dark web bust has occurred where the offending parties have been accused of selling drugs in exchange for cryptocurrency. Bitcoin and Bitcoin Cash were the cryptocurrency of choice in this case.
Jabari and Saudia Mohsen were distributing cocaine, cocaine base, methamphetamine, and marijuana through their accounts on the marketplace Dream Market. This was allegedly taking place for over a year, and the Mohsens are now entering a plea bargain that will involve giving up most of their crypto proceeds.
There have been many other cases like this over the last several years, as the dark web and cryptocurrency have been closely intertwined since the beginning. The anonymized nature of cryptocurrency makes commerce on the dark web possible, and the dark web is the means by which users can find each other.
Crypto vs. Cash
But what makes cryptocurrency so much more anonymous than a bag of cash? Both are difficult to trace, relatively anonymous, and accepted as legal currency. It seems like the main thing is that crypto lacks the traceable physical nature of cash.
There are many different digital currencies being developed by countries who wish to reap the benefits of a digital currency without losing control to Bitcoin. However, what the development of these coins miss is that for many people, a digital currency of this type is actually a downgrade compared to cash.
With a digital currency that isn’t cryptographically enabled, it is almost impossible to obscure the use of funds. Cash is censorship-resistant, and crypto is censorship-resistant. A government invented coin would not have this benefit and would inspire all sorts of worries about what someone could or couldn’t get in trouble for.
Kik’s Trouble with the SEC
This all comes at the same time as Kik is contesting violations of securities laws according to the SEC. They are saying that the SEC is misrepresenting facts in order to push the narrative that Kik’s $100 million ICO was executed with wrongdoing. In their words:
“The result is a Complaint that badly mischaracterizes the totality of the facts and circumstances leading up to Kik’s sale of Kin in 2017. These tactics may have gotten the Commission a decent news cycle, but they will not withstand meaningful scrutiny at summary judgment or trial.”
Right now, the SEC is a hotbed of controversy as they introduce new securities laws around crypto, begin to prosecute for errors of the past, and try their best to clean up the area. Their battle with Kik should be an interesting one, as the company has vowed to fight the suit for their Kin offering, and seems up to the task.
Coinbase in Trouble
Finally, Coinbase is now required to face a negligence lawsuit for their handling of the initial listing of BCH on the exchange. Other suits for fraud or unfair competition were dismissed with prejudice, but based on the current information, the judge ruled they would have to face these charges.
The brunt of the case is that Coinbase did not apply a standard of reasonable care while users were buying Bitcoin Cash for the first time, and it resulted in significant losses to users. Now they will have to prove so in a court of law.