Blockchain Is Not the Enemy

The Balance Between Enabler and Solution—Why Traceability Makes It Stronger Than Cash

Paul Soliman is the Founder and CEO/CTO of Hacktiv Colab Inc. and the Chairman and Group CEO of BayaniChain, where he leads initiatives in blockchain, enterprise tech, and digital nation-building. He also serves as CTO of Blockfy, focusing on decentralized finance solutions in the Philippines.

It all began with Silk Road, the notorious darknet marketplace that operated between 2011 and 2013, enabling users to purchase illicit goods using Bitcoin. Despite its revolutionary potential, it also showcased the darker side of cryptocurrencies: pseudonymity, speed, and decentralization. When Silk Road’s founder, Ross Ulbricht, was arrested, over 9 million BTC had already traversed the platform. Fast forward to today, and we see that those once-untouched funds now represent billions of dollars. Herein lies a paradox: while cryptocurrencies have emerged as tools for cybercriminals, they also promise a unique level of traceability that cash simply cannot offer.

The Rising Cost of Cybercrime

Cybercrime is projected to inflict costs of $10.5 trillion annually by 2025, according to Cybersecurity Ventures. This staggering figure positions cybercrime as the third-largest economy globally if ranked by GDP. Central to this growth is cryptocurrency, powering a range of criminal activities such as ransomware payments, money laundering, and online fraud.

Yet, there’s something crucial that most overlook—while crypto can facilitate cybercrime, it also possesses a remarkable ability: the transparency of every transaction permanently recorded on a public ledger. This transparency creates a forensic trail that cash transactions lack, thereby providing a valuable tool for law enforcement agencies.

The Anson Que Case: A Stark Example of Crypto’s Dark Side

The Anson Que kidnapping case in 2023 shook the Philippine public. It wasn’t just the audacity of the crime but how cryptocurrency infrastructure was exploited to launder the ransom payments. Que, a businessman from Zamboanga, was kidnapped and found dead, with investigators uncovering how the criminals funneled ransom money through registered Virtual Asset Service Providers (VASPs) to obscure the origins of the funds.

Reports indicate that authorities managed to trace the ransom money through licensed crypto exchanges. This revelation sparked serious concerns regarding the potential misuse of registered platforms for laundering, particularly in violent crimes such as kidnapping. Despite the existing regulatory frameworks—like Know-Your-Customer (KYC) and Anti-Money Laundering (AML) protocols—the criminals managed to move and convert the funds across multiple wallets, exposing significant compliance gaps within the local crypto ecosystem.

This case stands as a wake-up call for Philippine regulators, law enforcement, and VASPs. It underscores the pressing need for real-time transaction monitoring, effective enforcement of suspicious transaction reporting, and closer collaboration between crypto entities and governmental bodies.

Blockchain: Enabler or Best Defense?

Many fail to realize that blockchain is not anonymous; it is pseudonymous. Each cryptocurrency transaction is permanently logged on a public ledger, easily accessible via blockchain explorers. This level of transparency far surpasses any forensic trail left by cash.

Global authorities are beginning to understand the benefits of this traceability. In 2021, the U.S. Department of Justice was able to recover $2.3 million in Bitcoin from the Colonial Pipeline ransomware attack by meticulously tracing wallet movements on the blockchain. In the Philippines, regulations like BSP Circular No. 1108 mandate registration and KYC compliance across VASPs, granting local authorities a legal pathway to identify wallet owners through partnerships with exchange companies.

Tools such as Chainalysis are increasingly popular for tracing blockchain activity and flagging high-risk addresses. The Philippine National Police’s Anti Cybercrime Group has started utilizing these capabilities to enhance investigations, showing that effective monitoring can turn blockchain into a powerful ally against crime.

Reframing the Narrative

While it’s true that cryptocurrencies can facilitate cybercrime, so too can traditional technologies like phones, emails, and social media. The essential difference lies in the potential of blockchain to fight back. Innovative applications include smart contract-based anti-fraud systems and tokenized compliance mechanisms, showing that blockchain is evolving not just as a transactional platform, but as a comprehensive, defensive infrastructure.

Philippine startups and tech communities are leading the way by developing blockchain solutions for identity verification, budget transparency, and fraud prevention. Some initiatives are even leveraging zero-knowledge proof technology to maintain a balance between privacy and transparency.

It’s Not the Tool. It’s the Intent.

At its core, blockchain is not the enemy. Rather, it is a versatile tool—one that can be manipulated by malicious actors or strategically employed by governments, businesses, and communities. Unlike cash, blockchain provides a clear trail of transactions, and contrary to many traditional systems, it remains programmable and decentralized. In the hands of responsible stakeholders, it transforms from a potential risk into an impenetrable fortress.

If cybercrime poses a trillion-dollar threat, then perhaps blockchain is the trillion-dollar defense we desperately need.

Sources: Cyber Security Ventures, CNN, BitPinas, US Department of Justice.