This article is from es.cointelegraph.com and the original article can be read here
The world of crypto assets continues to grow at significant levels, this leads to new challenges in terms of security and accelerated evolution. We spoke with Daniel Cartolin, account executive for North America and Latin America at Chainalysis, who told us about everything Chainalisys is doing for the sector and his perspective in Latin America.
Eloisa Cadenas (EC): What is the balance in relation to the illicit activities carried out with crypto assets in Latin America and the perception that it has?
Daniel Cardolin (DC): Latin America regularly accounts for between 7% and 10% of all illicit activities globally. These numbers place the region below others such as Eastern Europe, Western Europe, Central and South Asia, and North America.
EC: How do you see the Latam market in the short and medium term?
DC: The Latin American cryptocurrency market is growing rapidly, and although we cannot say definitively, it is likely to see continued expansion in the coming years. In 2021 alone, users in the region received $1.8 trillion worth of cryptocurrencies, demonstrating a serious digital asset economy. We are already starting to analyze the data for 2022 and will have updated numbers to share later in the year.
EC: What are the main challenges in the world of cryptocurrencies?
DC: The main challenge in the cryptocurrency economy is to educate organizations and everyday investors on the basics of investing in digital assets. Education is the most important action to prevent criminal activity related to cryptocurrencies. Understanding how the cryptocurrency ecosystem works at a fundamental level and how to spot potential scams or untested and unsafe platforms can dramatically hamper the ability of illicit actors to take advantage of the market and nascent technologies.
EC: How do you see the position of the authorities in relation to the crypto industry?
DC: Government agencies play an important role in the adoption and security of the cryptocurrency ecosystem. By using tools like Chainalysis, local regulators can instill confidence in the digital asset space and help local entities in hopes of supporting the local economy and fostering innovation within their country.
EC: About central bank digital currencies or CBDC, do you consider that the security structure is similar to that of the crypto industry or what differences do you identify?
DC: Central bank digital currencies use the same blockchain technology as “traditional” public cryptocurrencies, with a few key differences. Most notably, blockchains for CBDCs are created by a centralized government organization, often a government-sponsored bank. This allows a local currency to be used in a digital context. In a sense, there is a higher level of security as regulators have the ability to track transactions more easily than with fiat currencies, acting as a tool to prevent crimes such as money laundering. However, this transparency can also be a detriment. With a blockchain controlled by a country’s central bank, regulators can impose restrictions on users based on location and provide government access to one’s finances.
These factors are important to consider when interacting with or choosing state-backed digital currencies, especially as many countries continue to explore creating their own currencies.
EC: Privacy is regularly talked about in the crypto world. In practice, how true is this?
DC: Cryptocurrency has a reputation for being anonymous and untraceable, but it actually operates on public and transparent blockchains. Digital assets prove to be much more traceable and transparent than other value transfer methods such as fiat currency exchanges. However, cryptocurrency is also pseudonymous, which means that access to private information is incredibly difficult, if not impossible, to find solely based on what can be acquired through traditional block explorers.
EC: What are the challenges you see within the DeFi ecosystem?
DC: DeFi is a nascent technology that can leave it vulnerable to bad actors due to unforeseen issues with a project’s code. The good news is that cryptocurrency is transparent and funds going to or coming from these platforms can be traced, which means hacks and stolen funds can be traced and recovered. Another problem is that DeFi projects often do not have a single owner, leaving users who have been victims of illicit activity without an entity to turn to. This also turns out to be a problem for regulators, as there is not necessarily someone to enact the legislative requirements. Because of this, the responsibility for protecting the funds in a DeFi project falls on the users themselves.
EC: How far does Chainalisys reach and how does it support the ecosystem?
DC: Chainalysis has more than 700 clients in more than 70 countries, including government agencies, stock exchanges, financial institutions, insurance and cybersecurity companies. Chainalysis continually works to create a safer cryptocurrency ecosystem through our suite of products and services. Our data powers the investigation, enforcement, and market intelligence software that has been used to solve some of the world’s most high-profile criminal cases and safely increase consumer access to cryptocurrency.
EC: What are the company’s short-term goals?
DC: Right now, we are focused on developing our vision as the data platform for cryptocurrencies. That means investing in our underlying data pool, the APIs to access it, and the software products that work with our data.