From the onset, cryptocurrencies came out with the promise of preserving privacy in the financial space. Finally, individuals and companies could access a means of sending and receiving payment, making investments, and traditional functionalities of banking and finance without worrying about intermediation from the financial institutions or whimsical and haphazard tendencies of the financial regulators.
This level of privacy is what made the asset class so alluring in the first place. For people who were tired of fiat currency and even the occasional regulatory problems of some legacy financial systems, this was redemption and the chance to finally seize control of their financial destinies. In more ways than one, this privacy focus was what fueled the early stages of crypto adoption.
Crime Enablement Became an Issue
However, it soon became a case of not being enough to grow. For all the benefits that they provide, cryptocurrencies could only gain so much adoption from people. Enthusiasts soon began looking into means to bolster assets' adoption.
Today, the cryptocurrency market capitalization is worth a staggering $350 billion, according to data from CoinMarketCap. The market has gone mainstream, and more people are beginning to understand it. '
The sad part about that is the renewed focus on how bad privacy can be. Most crypto detractors tend to point to the fact that the asset has been used time and again to facilitate money laundering, fraud, and a host of other illegal activities.
To be fair, they're not wrong. There is always a propensity for cryptocurrencies to enable crime, and we've seen it happen time and again.
In 2020, things appear to have gotten worse. Criminals understand that people are staying and working from home more, and this means that they are more reliant on the internet. This growing internet reliance has only fueled hackers' operations, as they have better targets.
In June, crypto intelligence firm CipherTrace published a report confirming that the volume of illicit cash stolen through crypto crimes across the first five months of the year was $1.36 billion. That number is already more than the $900 million-plus that hackers could manage last year.
With such a momentum going, CipherTrace added that the volume of ill-gotten crypto stolen this year could very well break the $4.5 billion mark - a record hat criminals managed to make last year. As explained, the company highlighted that criminals have taken advantage of the coronavirus pandemic and the need for people and companies to work via the internet more.
However, perhaps the most interesting point is that most of these funds come from fraud and money laundering - not hacks and direct money theft. As CipherTrace explained, 98 percent of the funds came from money laundering and fraud.
Governments Clamping Down
For long, the issue of cryptocurrencies enabling fraud has been a lingering problem. Now, regulators are standing up to do something. In 2019, the Financial Action Task Force (FATF) published the Travel Rule, which guided how digital asset service providers should comply with Anti-Money Laundering (AML) and Know-Your-Customer (KYC) laws.
There is also the Fifth Anti-Money Laundering Directive (AMLD5), which was put forth by the European Union last year.
Laws like these put a significant strain on crypto exchanges, wallet providers, and other asset custodians. Now, they have to keep details on their customers and their transactions, especially if these transactions cross a certain threshold.
The Hope for P2P
This is where peer-to-peer (p2p) exchanges come in. While they're not as popular as the more established exchanges, p2p platforms are still quite impressive in their own right. They link people together directly, thus cutting out the middleman.
Most significant is the fact that these exchanges can work without interference from regulators if they want to. Since there are no centralized operators facilitating transfers, p2p platforms are free from the need to collect information.
To be fair, they can implement these if they want to. LocalBitcoins, one of the top p2p platforms, recently constituted AML verification checks to get approval in its home state of Finland.
However, most p2p exchanges are still free and able to allow users to enjoy the privacy which so many seek.
Today, p2p exchanges are even more advanced, providing additional services. Take Nimbus for example. The exchange has an Initial Public Offering (IPO) hub, a digital asset marketplace, and even facilities for lending. Fernando Martinho, CEO Nimbus platform explained:
Our vision of a crypto platform is embodied in this Dashboard - a combination of ease of use, comfort, and aesthetics."
Nimbus currently operates a p2p platform as its main service. However, it does so much more than that. By bringing in concepts from the traditional crypto and tech spaces, it provides an expansive financial and technological environment that allows everyone to have a part to play in the emerging modern economy.
Cryptocurrencies came with the promise of liberating people from traditional control. Nimbus can do better, as it allows people to enjoy greater interconnectivity and provides a platform for them to interact easily.
The platform already implemented the highests safety standards and functionalities, combining crypto technology with cloud-based accessibility. With these, users can enjoy the best of both worlds - and, most importantly, enjoy their privacy.
Nimbus is built on the Nimbus Core technology, which powers its functionality a great deal. The platform provides capabilities like social trading, a crypto merchant service, an asset tracker, and even an all-inclusive FinTech marketplace. As long as an individual or a company has a FinTech need, Nimbus will be the encompassing solution that they can use.
The goal is to have people from all walks of life, including those who love optimal privacy and security to fulfill their financial needs.
So, in a world where privacy is becoming more of a problem, p2p exchanges can be the solution. The fact that they're now incorporating more features into their main platforms makes them even more appealing.
