Andre Smith

Al Jazeera

Crypto currency is a digital currency, which has a private, non-governmental block chain,
which means that all transactions made through crypto currency are undetectable and
anonymous. A block chain is a list of records called blocks, which contain history of all
transactions made. Through crypto currency many illegal transactions are made but because
of the private block chain no one can trace who those transactions were made by. This is the
same case with fiscal fraud. With the growing use of crypto currency, the rise of fiscal fraud
increases, as it is very easy to bypass the system and evade paying taxes. This is why
governments and banks fear the growth of crypto currency, as there is no way of monitoring
and ensuring the payment of taxes.

It is difficult to combat fiscal fraud through crypto currency; however, there is a measure that
can be taken to reduce the amount of fiscal fraud. If crypto currencies implement a KYC
policy, then people would be forced to pay taxes, as their transactions would no longer be
hidden and unrecorded. KYC (Know Your Customer) policy is the process of identifying and
verifying the identity of customers. So by introducing a KYC all transactions could be
checked. This method of preventing fiscal fraud takes the anonymity away from crypto
currency, and would eradicate all forms of illegal activity through crypto currency.