Blockchain and cryptocurrency technology has always lent itself to darker themes and nefarious uses. In the beginning days of Bitcoin, the primary use of the currency was on the underground black market. Used for the trade of illicit drugs, guns, and even hitmen, Bitcoin contributed to countless criminal violations, creating a litany of problems for regulatory authorities in the law enforcement sector. This was to be expected, given the anonymous nature of the currency.
But even though most cryptocurrency uses for nefarious purposes have been stopped by global cooperative law enforcement efforts, there is still trouble in the water for the crypto trading market as it continues to develop and expand all over the world. Regulating the cryptocurrency trading market is already difficult for authorities all over the world. Most currencies are very hard to track, and blockchain technology creates a host of logistical barriers to proper legal regulation.
But it isn’t just the legal cryptocurrency exchanges and betting which has become the cornerstone of many crypto ecosystems. Illegal cryptocurrency bets and wagers are happening all over the blockchain, and the implications could be significant. Regulators are having trouble figuring out how to respond to a litany of illegal wagers being placed on and off of the dark web on a variety of sketchy topics.
Some of these wagers deal with topics that may, by their very nature, be illegal in the United Kingdom. Underground cryptocurrency betting markets allow participants to place wagers on whether or not President Donald Trump of the United States will be killed by the end of the year (2018), for example. The market is reportedly worth over USD $500 billion globally.
The most significant market for making bets such as these is known as Augur, which launched in early July of 2018. The protocol is built on the Ethereum blockchain’s platform for crypto-applications. The platform actually allows for its users to bet on the murder of a variety of different leaders, including political heads and prominent business executives like Warren Buffet.
So far, the market has been incredibly versatile, raking in over USD $1.5 million in over 800 individual bets from its users. Not all of the bets have been macabre in nature. The site hosted extensive betting on the World Cup, as well as price markets for Bitcoin and Ethereum alike.
The Augur platform uses smart contracts, which allow for bets to be placed and outcomes to be meted out without the participation of a centralized authority. While the traditional system means that someone has to mediate and execute the details of the outcome of the bet, Augur’s smart contract configuration allows the system to operate fully autonomously.
The founder of the foundation outlined in a Forbes interview that traditional markets are rife with risks associated with the use of an intermediary party to make transactions happen. The foundation behind the market is actually unable to in any way regulate the market which they initially created. This is both a benefit to much of the community and a terrifying feature to regulators who seek to prohibit certain betting markets from happening on the site.
It isn’t just the sketchiness of betting on assassination that creates problems for U.K. regulatory authorities. The UK’s Gambling Commission (UKGC) called it a problem that, while the owners of the platform are facilitating trade, they themselves never interact with the betting process.