You Won't Believe How Bitcoin Became the Go-To Currency for $100 Million Criminal Enterprises!

Cryptocurrency has long been marketed as a revolutionary financial tool, but its darker side is increasingly coming to the forefront, particularly in criminal activities. A recent incident involving the kidnapping of NBC's TODAY co-host Savannah Guthrie’s 84-year-old mother, Nancy Guthrie, has brought this issue into sharp focus. Reports indicate that the kidnappers demanded payment in bitcoin—initially around $6 million and subsequently, one bitcoin for information about their identities. This raises serious questions about the intersection of modern digital currencies and crime.

To understand why bitcoin is becoming a favored tool among criminals, we consulted Woodrow Hartzog, the Andrew R. Randall Professor of Law at Boston University School of Law. Hartzog's research focuses on privacy, technology, and the regulation of digital systems, and he has even testified before Congress about data protection and AI oversight.

“Bitcoin is the most popular form of what has been called cryptocurrency, which describes a system that allows people to communally share a ledger that keeps debits and credits of a particular unit of transaction, all wrapped up in encryption,” Hartzog explained. “This is where the 'crypto' comes from in cryptocurrency.” While there are many cryptocurrencies, bitcoin remains the most well-known. It has been presented variously as a currency, a store of value, an investment, or even a form of gambling—all of which create avenues for exploitation.

Several factors contribute to the growing use of cryptocurrency in criminal activities. First, if criminals can convince others that a cryptocurrency holds value, there is enormous incentive to accumulate it, often with little accountability. Transactions in the realm of cryptocurrency are largely de-identified; anyone can observe transactions, but the identities behind them are often obscured. This facilitates cross-border exchanges that sidestep traditional financial systems, which generally have built-in fraud detection and consumer protections. In contrast, cryptocurrency lacks these safeguards.

The implications are dire. Ransomware attacks have surged in recent years, with hospitals and other institutions crippled by demands for cryptocurrency payments, which are harder to trace than traditional forms of payment. The limited transparency around these transactions has made cryptocurrency attractive for money laundering and other fraudulent schemes. “Because you don’t know who’s behind the bitcoin transactions, accountability is much harder,” Hartzog noted. Traditional payment systems have guardrails designed to protect against insider trading and financial exploitation; these protections are virtually non-existent in the cryptocurrency world, making it a perilous arena.

Another point of concern lies in the very nature of cash, which has historically been a privacy-friendly currency. “You have to physically possess cash to use it, and it has physical weight,” Hartzog said. “You can’t lose it by someone hacking your account.” This physicality brings a level of accountability that bitcoin lacks, as transactions can occur without the user ever being present.

While many people may view cryptocurrency as a modern marvel, Hartzog cautioned against its promise—especially when juxtaposed with its reality. As a currency, bitcoin is expensive in terms of energy and efficiency. It’s cumbersome to use unless intermediaries are involved, which introduces additional complications. Furthermore, its volatility makes it unreliable; who wants to accept payment in something that could fluctuate in value from $1,000 one day to 30 cents the next?

As an investment, bitcoin also poses problems. Its value is largely based on the “greater fool theory”—it only holds worth if someone else is willing to pay more for it later, not unlike gambling. Hartzog elaborated, “Casinos have rules to prevent powerful players from exploiting everyone else. In cryptocurrency, those protections are minimal.” Unless one is manipulating the system, they run the risk of becoming the “greater fool.”

The future of cryptocurrency regulation remains uncertain. Current trends in deregulation pose risks that could exacerbate existing problems. If lawmakers do not step in, issues like deepfakes and scams targeting vulnerable populations could proliferate. “We need clarity about what cryptocurrency is and how it should be regulated,” Hartzog asserted. Targeting cryptocurrency exchanges—where digital currency is converted into fiat money—could be a starting point for regulation, along with comprehensive oversight of AI technologies.

Overall, the structure of the cryptocurrency system itself raises significant concerns about accountability and consumer protection. Given the current political climate, where agencies designed to protect Americans from financial exploitation are being defunded or weakened, the urgency for meaningful regulation has never been greater. “Enforcing existing laws and supporting enforcement agencies would make a significant difference,” Hartzog concluded. “This is as much a political problem as a legal one.”

As the kidnapping case of Nancy Guthrie unfolds, it highlights a broader issue: the unsettling reality that cryptocurrencies like bitcoin can facilitate criminal enterprise, making it essential for society to critically reflect on the implications of these emerging technologies.