> For the complete documentation index, see [llms.txt](https://www.digitalnations.xyz/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://www.digitalnations.xyz/web3-overview/the-web3-ecosystem/cryptocurrencies/problems-with-cryptocurrencies/tax-cheats-and-criminals.md).
# Tax Cheats & Criminals
Several of the core benefits of cryptocurrencies could also be seen as weaknesses. Indeed, critics argue that they are the ideal venue for:
* **Tax Evasion**: Because cryptocurrency transactions are anonymous, people will use them to evade taxes
* **Criminal Activity**: Transactions can’t be regulated, which means that people will buy illegal goods online and criminals can easily log in to a decentralized service to launder money
* **Funding Terrorists**: Because the government can’t seize assets like they did with Russia after it invaded Ukraine, terrorist groups will hold all of their funds in Bitcoin
While all of these are definitely possible – and even *seem* logical at first blush -- the data simply doesn’t support these fears. In fact, only 0.15% of all cryptocurrency transactions are connected to criminal dealings.
**Illegal Activities Represent Only 0.15% of Cryptocurrency Transactions**
A big part of the reason for this is probably because cryptocurrency transactions aren’t anonymous, they are “pseudonymous” – meaning that if anyone can tie you to your address, they can see *all* of your transactions. This has proven a boon time and time again to law enforcement, who have used the transaction history to track down several high profile thieves. In 2022 alone, the Department of Justice seized $3.6 billion from crypto hackers.
Ironically, given the fact that all transactions are recorded forever on a digital ledger, cryptocurrencies may ultimately reduce crime, fraud and tax evasion.
---
# Agent Instructions
This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com.
## Querying This Documentation
If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question.
Perform an HTTP GET request on the current page URL with the `ask` query parameter:
```
GET https://www.digitalnations.xyz/web3-overview/the-web3-ecosystem/cryptocurrencies/problems-with-cryptocurrencies/tax-cheats-and-criminals.md?ask=
```
The question should be specific, self-contained, and written in natural language.
The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.
Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.