The term “virgin Bitcoin” is starting to wave among cryptocurrency enthusiasts. Clarifying the significance and meaning of this word is critical in a world where the crypto ecosystem faces increasing regulatory hurdles every day. According to CipherTrace CEO Dave Jevans, “Virgin bitcoins” are Bitcoin tokens that have not yet been tied to a transaction record (TX). This makes coins ideal for thieves seeking to conceal their identities or launder money, as there is no clear record of who purchased them. The recipient cannot know where virgin Bitcoin originated because it cannot be linked to a wallet or other cold storage entity.
The decentralized ledger that the Bitcoin blockchain uses makes it easy for anybody to view the complete transaction history of any particular cryptocurrency, which is another great feature of the blockchain. Think about Bitcoin: every coin has a tally of all the buys and sells that can be proven using cryptography. If a Bitcoin has been involved in illegal conduct, any future transactions involving that Bitcoin will be affected. Some fraudsters go to tremendous lengths to purge their cryptocurrency holdings before using them, and this is a big reason why, according to Jevans.
Virgin Bitcoins on G-20 Agenda
Given the preceding, it’s important to mention that the G-20 summit core governing committee in Osaka, Japan, voted to apply the Financial Action Task Force (FATF) rules to digital assets, even though they are usually connected with fiat currencies. Babel Finance CEO Flex Yang discussed the issue in an interview and provided his thoughts, saying that interexchange transactions involving Bitcoin will be subject to transparency regarding the senders and receivers. Authorities open the floodgates to several investigations when they examine various ledgers for wallets implicated in unlawful cryptocurrency exchanges, hacks, etc. Institutional investors are still considering Bitcoin despite having a far lower risk tolerance. Many long-term investors do not know how the Bitcoin business will meet FATF standards.
Yang explained the importance of unadulterated Bitcoins and how regulated banks may make life difficult when dealing with tainted cryptocurrencies. In particular, he mentioned the possibility that authorities might lawfully seize or retain a Bitcoin token permanently if even circumstantial evidence pointed to its previous use for dubious objectives.”Try putting your money into a bank associated with a drug cartel or some other criminal organization; they won’t take your deposit,” he added.
Are People Wanting Virgin Bitcoin?
It appears that many institutional investors are primarily interested in obtaining virgin BTC, even though other cryptocurrencies have the same regulatory framework. The use of any type of currency, digital or fiat, can permit unlawful actions. On the other hand, Bitcoin’s more transparent ownership structure makes it easier to clean up virgin coins than actual cash.
Additionally, despite its public lack of mercy for anyone who may possess virgin Bitcoins, the Chinese government appears to have a soft place for them. Yang claims that the enormous mining community in China is still unregulated. As a result, the demand for pure Bitcoin is increasing dramatically globally, and mining operations in China appear to be thriving. Yang said the buyers are in the US and other nations with more stringent restrictions. The U.S. and other more regulated regions are the primary purchasers. The miners in China are only merchants… Potential buyers may be drawn to these coins due to their uniqueness and the perceived simplicity of compliance in an uncertain regulatory landscape. Buying virgin Bitcoin might not be a good idea for family budgets or people purchasing. The fact remains. Nonetheless, that virgin (or white) coin continues to command premium prices due to its evident increased trust.
Why is Bitcoin’s Illicit Past a Problem?
Jevans notes that Bitcoin’s (BTC) shady history generally involves a web of illegal activities, such as terrorist financing or international money laundering. The owner of a token remains vulnerable even after numerous exchanges since investigators may easily trace its payment path. If the value of these tokens drops, the CEO of CipherTrace claims that Bitcoin’s fungibility will be much more compromised due to dark transaction histories. It is reasonable for hedge funds to be concerned that a few defective tokens could jeopardize their whole holdings. The value of larger traders’ investment pools could take a hit if they unwittingly hold on to more stolen assets, while smaller traders might be less impacted.
Even one dubious transaction might tarnish a coin or token. Nevertheless, it is noteworthy that local governments can sell these commodities after thoroughly recording their transaction history to purge illegitimate Bitcoin. In 2018, the US Marshals Service sold 3,813 Bitcoins at a sealed bid auction for an estimated $51.5 million, the most high-profile example.
Virgin Bitcoin Data Worth Taking Note of
- The crypto intelligence team at CipherTrace estimates that Bitcoin enables more than 75% of all black market transactions.
- A large number of cyber criminals make use of techniques such as coin mixing to try and sever the path attached to a particular digital currency. While it may still be possible to view the transaction history of a given token using advanced cryptographic methods, coin mixing makes the process extremely complicated.
- There was widespread speculation that several different Bitcoin mining businesses located across the world provided financial support to the alleged 2016 U.S. election hack by Russian conspirators.
- According to CipherTrace’s investigations, the current crackdown on Iran’s mining sector was intentional. Strong indications suggest that the local regime may benefit from the stolen mining equipment.
Jevans concluded by comparing and contrasting the premiums for virgin Bitcoin with those for regular Bitcoin. Reportedly, he made the following statement on BestMixer’s Gamma level, which they represented as virgin coins, in November 2018: They took 5% of the sale. According to CipherTrace’s research, these tokens were not unused after being cleaned through exchange hopping. This greatly increases the visibility and value of newly minted currencies. As regulations tighten, it becomes more difficult to use regulated exchanges to launder money, which increases the value of “clean” coins.
According to Yang, premiums for virgin Bitcoin are circling 10%. On the other hand, firms with more experience in the market may charge 30% more for virgin coins.
