Bitcoin Forum

As there are many corrupt wealthy people around the world, such as politicians and crooks, and they would always try to get rid of their cash in many ways such as money laundering. Since there are many ways to get rid of cash ranging from the obvious to the rather obscure. Has anyone used cryptocurrencies in money laundering schemes?
   
I mean considering the anonymous nature of cryptocurrencies around the world, I think that it would be a good idea to use it to hide your money by converting cash into cryptocurrency which can only be accessed by yourself and anyone who has knowledge of the secret passcode of your ledger.

Is it possible to do so or the authorities have countermeasures in place in order to catch people red-handed when laundering money through cryptocurrencies.

There is a problem of withdrawing money to a card, that is, converting crypto to fiat. Then the question arises from the authorities, where do you get so much income from. When replenishing the account, I do not know cases when the authorities controlled this.

yes, it happened before... For example:
https://www.manhattanda.org/da-vance-announces-guilty-pleas-in-2-8-million-internet-drug-ring/

This being said, i'm pretty sure 99% of the people laundering money are using the "old fashioned" ways... Like using a store front or a business. Using crypto is far to complex, and it still requires you to give your dirty money to somebody else face to face so you get crypto currencies in return, these transactions can all be traced, and when you want to spend your "cleaned" money, you need a second interaction with a potential crypto buyer....
Very complicated to do this right, and even if you do, it would probably have been easyer to use other means of money laundering.

Same goes for terrorists, drug buying, weapons purchases.... Sure, there are darknet markets, sure some dealer *might* accept monero, sure a terrorist *might* have some crypto... But i'm pretty sure +90% of all drug/weapon purchases are done with plain old cash.

maybe it could have happened because they used crypto technology for abuse, because they hid their funds. the nature of crypto like this can be exploited by people, one example is the concealment of money so that it cannot be known freely by banks. but I have not known the news about this but if only guessed, I have seen it.

People might have been doing that in the early years but one thing I can say that with the government regulations especially with the KYC being implemented by most of the exchanges it would be extremely difficult for people to launder money and evade taxes with cryptocurrencies anymore

Certainly there would be some kind of anti money laundering countermeasures in place to monitor / detect these kinds of illicit activities just like what happened to the person indicted on the illegal Silk Road marketplace referred in this article (https://www.coindesk.com/silk-road-seller-pleads-guilty-to-money-laundering-19-million-with-bitcoin) .

If the exchange is not implementing any KYC policies, and does not care about how much money you're getting into their exchange (assuming that a money laundering scheme would involve large sums of money), then they can probably use cryptocurrencies, especially those top ones such as Bitcoin and Ethereum (because they still need the money to be safe, and not store it on just any shitcoin). However, if the exchange implements KYC or starts asking questions if they have a limit of how much you can exchange, then authorities can contact these exchanges and help them solving the case.

But there are exchanges without verification of KYC. I think it is possible to launder a certain amount of money on many exchanges

Yes given the anonymity of crypto I am sure that it is being used to do it.
I don't even think that KYC's from trading could do anything from it,
People could easily bypass it they could submit fake ID's and document or send it little by little to the people that they know.

Politician can use any personnel with them to do KYC and just pay them. They might put some of their money in crypto to avoid putting it to the SALN. I guess those who planned not to be loyal in government already put some of their assets in crypto. Some businesses may also use this for their illegal transactions.

Bad people will always find ways to take a good product like blockchain and crypto to be in their favor.

This is exactly why FATF created its guidelines, which potentially can paralyze the whole cryptocurrency market. As well, considering that privacy coins have the anonymous transfer modes, which somehow can break the transaction trace - here is the reason why those privacy coins are treated by authorities of many countries with full hostility, and even forcing exchanges to remove them from the list of available ones.

Some of the people who done it had successfully laundered their money by using someone else to do it. But why should they be doing it with crypto today where they have to deal with regulations. They'd best do it the usual way by having a front business, building a fake business and some products inside I think will help their money come out clean.

thinking that it is very difficult to follow the transaction trail, and the existence of a mixer system in bitcoin transactions makes many money launderers launder their money using cryptocurrency. So far, I think many people have done something like that. in fact, this is also one of the concerns of the government. because of this, the KYC system is implemented at each exchanger to prevent money laundering.

I guess there are certain issues like that and that is why the government is against cryptocurrency because in cryptocurrency criminal now have open new pathways for them and new methods of Money laundering and that that way government are certainly concern about it, and it covers up many violations regarding laundering like tax violation, cybercrimes, and other sources with online casino's, financial firms and cryptocurrency is a convenient way for them on clearing up these funds, And as cryptocurrency gain legitimacy I think these certain problems will only continue to grow.

There is a possibility that they collaborate their stolen money to crypto so that there would be no trace of the crime they committed but there is also a possibility that nothing like this was ever made. We all know that most of the government all over the world are still against crypto and they are usually clueless on what it is. It could just be an assumption that they do but if a certain official buys from the black market, things like drugs and firearms, they might use crypto as they commit monet laundering at their state.

Well mixing the coin with a coinmixer would be difficult to trace or track  however on the point of exchanging those coins to fiat would be questioned by the authorities concerned based on the huge amount of money involved that is why money laundering is a quite difficult now based on security measures put in place by many countries.

money laundering is not easy even with crypto, especially now that there are many exchanges that require the KYC identity, I think money laundering with money or with crypto is equally difficult except for those who are experts, in my opinion the government's ban on crypto is not due to money laundering, because money laundering was often done before crypto was created.

You can read it here, Bitcoin, crypto-coins, and global anti-money laundering governance (https://www.researchgate.net/publication/322596368_Bitcoin_crypto-coins_and_global_anti-money_laundering_governance).

However, you need to take note though that criminals will be criminals, so regardless of fiat or crypto, they will always find ways to hide their criminal act.

As far as countermeasure goes, I think there's none, because crypto addresses doesn't have any names attached to it, so unless authorities identify an address to criminals syndicates, it's going to be a cat and mouse game.

If you have been aware of what others are saying about Bitcoin, one of it is that it's being used for illegal activities such as money laundering. I'll clarify one thing I've noticed that you said that it's to get "rid" of their cash, but that's not true. Money Laundering, by definition, is to clean dirty money, dirty money as obtained illegally.

One thing I found in common with wealthy people is that they want to spend as little as possible towards taxes because they want to keep it all. And just like mocacinno said, there are portions, but not everyone tried it. Mainly, they use cash, and I agree with mocacinno again with them using Cash instead of digital money.

They are probably using crypto to send money somewhere and find a way to clear Bitcoin. There are a couple of things they could do with that, and it's to use different tumbler/mixing services and unregulated exchanges. This is probably why some people are still uneasy when it comes to cryptocurrencies.

For catching the bad guys, the government could have its division, which specializes in those kinds of things.

In my opinion there must be a culprit, because this is a huge gap that is indeed very able to be used as a one-way money laundering prayer with the crypto nature that is kept secret.
But it will be difficult when the crypto is converted to FIAT, because it is not possible he will use payments with crypto while the number of payments that support crypto is now very limited.

Government's insecurity as well as possible ban on crypto is due to various factors and money laundering is a part of it as the major reason are terrorists funding, extortion wherein kidnappers demand ransom in crypto to avoid any sort of tracking. These issues were there before  existence of crypto but now it is easier and government is afraid that their national currency will take a hit if people prefer crypto.

Law enforcement officials busted multiple money laundering schemes this year involving Bitcoin ATMs, like this one:

Bitcoin ATMs Show Gap in EU’s Money Laundering Rules, Police Say (https://www.bloomberg.com/news/articles/2019-07-11/bitcoin-atms-show-gap-in-eu-s-money-laundering-rules-police-say)


There have been lots of arrests over the years associated with laundering money from darknet markets. The standard police sting goes like this: One party charges a high premium and doesn't do AML/KYC, the other party (undercover police) states that the funds are illicit proceeds. Once the transaction is completed, the first party is proven guilty of operating an unlicensed MSB, failure to implement AML procedure, and possibly conspiracy to launder money.

KYC on the exchange is not enough, they can use a mixer in large quantities without being noticed. Most of the money laundering cases that are revealed are because they were carried out in a hurry and in a large amount. case examples in 2018: https://www.coindesk.com/europol-nabs-11-in-crypto-drug-money-laundering-case

the government can track all unnatural transactions only from credit cards, or bank accounts of each suspect, and now of course they have been helped by KYC on the exchange, but I have never read that there are US police cooperating with bitfinex only because of alleged transactions money laundering goes to that exchange (for example).

Well the way people would launder money would be fairly easy, they would just buy crypto-currency with cash or another safe payment, and now they have crypto that is worth the same as their cash, but not as dirty.

I believe there has been cases where the police where able to track transactions from a wallet, into a bunch other addressess, and then went to the exchanges with this, and responsible people got punished. Still requires some slip-ups on their part though.

The authorities and regulators are closing the loopholes for money laundering with the introduction of KYC requirements for most of the services

that are used as a off-ramp to fiat currencies. I am not saying it is not happening anymore, because there are still plenty methods to do it, but it

is not as easy as it was before they started closing the loopholes. (eg. Localbitcoins)  There are also other more anonymous coins like Monero that

are more suitable for money laundering.  ::)

Bingo. Why learning whole crypto knowledge when you can use old fashioned ways known for 100 years? :P Common knowledge wins here.
Thats why you dont hear about it much, because its not happening much.

I have heard that there are ways to launder money, but in reality I have never observed it.Money can be laundered, of course, but I don't know how governments take countermeasures.(in general, already tired of these scammers, rich, speculators).What use are they?

One of the most famous websites back in the days was Silk Road, where large exchanges and transactions were done anonymously in the website via purchasing services/products. In this way, most people have laundered money all over the world without the need of paying taxes. Not to mention, the website is full of products (e.g. drugs, drug equipments, etc.) and the FBI had seized around 28,000 BTCs at the website.

Just to add, this is one of the reasons on why some countries are hesitant to legalize bitcoin transactions due to its anonymity factor which could lead to a proliferation of drug abuses and transactions.

Of course there are alot of them ::)

Just from dark web you will notice such launderings. Goes from selling illegal medicine to guns....
That's why we need more regulation and verification against illegal activities.

Take for instance pronzi schemes where the company uses some alt company information to get their funds transfered to their banks.
That's money laundering...

It's possible especially with the nature of cryptocurrency like bitcoin. We don't know who, and how many uses crypto for money laundering. But anything can be possible for money. That's what greedy people do. Politicians, wealthy people, they can find ways on how to launder money without getting caught. That's why some governments don't really trust crypto because illegal and criminal activities can be done by the use of cryptocurrency.

Indeed, nothing is impossible when it comes to money even politicians will take advantage of crypto if they wanted to since they have some power. They will do it just to the benefits they wanted and you can't easily recognize it because government officials are very wise, they have different way of thinking and levels of perception. Some of them may think that crypto has a great potential in their country and some of them thinks that it can be beneficial to them and not in their country. We can't just change the fact that there are some politicians who are being selfish, they are thinking about themselves. Though there are still some good politicians who thinks about how crypto can be beneficial to their people as well on their country. It's kind of sad to see that there are people who keeps on using crypto in illegal activities which makes people hesitate to invest or not because they are afraid to risk, knowing that crypto's reputation is ruined by many people.

I have seen some money laundering schemes that used cryptocurrency and casinos in the past. Let's say you start a Ponzi scheme, then you collect 50 bitcoins with that. If you go with those bitcoins and chase some big multipliers in casinos, then you can prove that you earn that money with gambling. So, is common tho see people doing weird things with their coins trying to make it looks like clean.

Actually, money laundering is keep increasing in our society and scammers are using cryptocurrencies to get money from others. It is the reason why the governments are creating more laws and regulation to it. There are politician who are not favor in cryptocurrencies that's why there are still countries that are not still regulating it.

Due to cryptocurrency's nature, it is most likely that people had used crypto for money laundering activities. You can easily move a huge amount of money in cryptocurrency. KYC procedure can easily be bypassed by passing a fake document or even buying ID through the dark web.

I’d think China would be doing this the most but not always, so obviously the need is to transfer whatever savings or funds out of China, yet Bitcoin doesn’t always appear to be the cheapest way to do so, my experience is that there are these companies who have establishment both in China and Hong Kong, since Hong Kong has no foreign exchange control, it’s still the main destination of fund transfers so far despite all that chaos (this was to change with the expedition bill but obviously not anymore since the bill has been officially withdrawn), these companies take your money in China and send money to your HK bank account with their HK establishment.

The cheapest we could find moving funds out of China for individuals with Bitcoin is around 2%, it’s another matter for corporates who have establishments offshore (it can go down to less than 1%), the alternative where going through companies who have establishments on both sides is usually cheaper (<2% close to 1%), but if you want to move a large sum of money (maybe in the millions or more), the rates can go down with Bitcoin.

Bitcoin is still not the main way people transfer money out of China, most people who adopt Bitcoin is still because they want to avoid the Chinese government freezes their bank accounts, usually some kind of criminal in Chinese government’s definition.

The problem with scammers using cryptocurrencies is that unlike with card payment (or in some jusrisdictions wire transfer as well) you are not able to reverse transaction - the most notable exemption to this case is the series of events which lead to hard fork between Ethereum and Ethereum Classic.

It can be all possible if criminals and even in government would like to play illegalities.

https://www.elliptic.co/our-thinking/bitcoin-money-laundering

These are some ways how criminals and some sort of illegalities run through crypto/bitcoin. They can easily hide transaction as they stay anonymous but the government has already traced some of these things and put into jail. But it is really a tough job for them, in fact, for a number of illegal transactions using crypto, only a few of them have been caught. We can't deny the fact also that some big personalities might be one of them and somewhat protected which no one could dare to touch them. Money have power and that its how crypto may work just like fiat.

Or a crypto exchange!  Lol, I'm only half kidding--it could be that crap exchanges like Yobit are fronts for something, but that's just wild speculation on my part, and I'm not accusing them or any other exchange of anything.  But I have thought it would be an excellent way to launder money before, and no doubt that's going to be an opportunity gone by the wayside once all exchanges are regulated.

I'm pretty sure there have been instances of crypto money laundering in addition to the ones mentioned in this thread, but I don't think it's anywhere near as big a deal as the government would want people to believe it is.  Like you said, most money laundering and tax evasion happens like it always has, with fiat and through otherwise legitimate businesses.  That's not likely to change, either.

That's not money laundering, necessarily.  Those are just criminal activities in general.

It could definitely not be skipped if the topic is about money laundering schemes, especially in utilizing cryptocurrency as a subject to commit illegal crimes, as technology improves, there are also wide range of fraudulent activity that criminals could choose from. In my opinion, even in pyramid investment, it could be prone, or there is a huge chance that it will turn out to be scam, cryptocurrency is too easy to use and transact because of anonymity, and people could always take advantage of that if they will utilize crypto in a negative manner.

thats why there are strict policy now in many countries about AML because of those cases involving money launderers .

so it is always possible that bad people are doing this just to hide their money from the eye of either government or which ever they are hiding for.

but just like any other financial aspect this is always in place ..

and that is the sad part because bad elements can bypass everything just for them to have place in their activities.hopefully in time they will be punished for the crypto market will stay away from abused.

Correct. The very reason why exchanges these days are implementing KYC on their users, I've seen some exchange who doesn't have KYC but is now announcing that they'll have as soon as possible. Fraud and money laundering have been a problem since then, Criminals are taking advantage of the use of cryptocurrency as it hides their identity making it easier to transact globally. Another trigger why did the government tell exchanges to have KYC is because of tax evasion from the businesses owners, instead of fiat they are using crypto to avoid paying taxes which the government didn't like. Now the money laundering has been addressed, what the exchange should be doing now is to improve their system to avoid hacking occurrences.

Of course, with all this anonymity and confidentiality, some illegal activity would have been carried out with cryptocurrency. It is common knowledge too if the dark web uses cryptocurrency as one of the payments there. That is the reason that makes some countries limit the use of cryptocurrency even imposes very strict rules. For the sake of avoiding illegal activities.

I believe such money laundering schemes really happen most in the dark web.
And the reason also why there are bitcoin mixers to preserve their privacy as they say.
But when they start to convert their coins to fiat, that's where KYC comes in.
Most of the remittance/payment centers and other entities that accept the conversion of crypto to fiat requires some identification.
So with that, it is very hard to launder money because your identity is known and they are regulated under Central Banks.

Maybe there is but none reported. Whoever will do such thing will have a hard time converting to fiat. Unless they know someone who is willing to convert it for to fiat but that will require face to face transaction which endangers both parties involved. Its not an east transaction that's why i'm thinking why they think it can be used in such activities.

Here's an article that can shed some light on mixing services used to launder stolen crypto: https://medium.com/cobo-vault/chipmixer-for-transaction-anonymity-c6a724573ba7

In my opinion, a money laundering scheme that used cryptocurrency is very difficult to do now, because the government has anticipate it.
By applying KYC to local exchanges.Do you want to used exchanges that do not apply KYC but if you want to make a deposit or withdraw
the amount is usually in the limit. So from that it is quite complicated that money laundering is used by cryptocurrency, thus the person who
do money laundering would prefer to use the old way to do money laundering. There are several event of money laundering that used
cryptocurrency. However, the event is very small, it is also prone to get caught by the government.

Cryptocurrency cannot escaped the laundering of many people in the world perhaps more and more people are being scammed and fooled everyday, especially this bitcoin season where people wanted to have more money because of Christmas. They are using the word crypto because we all know that it has a larger value than other investment in stocks therefore we should keep our eyes and be aware in every scheme they are making.

Lots of examples already present. Some are framed by the governments which just doubled the value and some were real laundering but they justify it through their reasons.
Many of the terrorist organizations are running by using cryptocurrencies now, we cant deny that. But the positive side is allot more useful than the negative.

Criminals did take the advantage of what the cryptocurrency has to offer, we should not worry about it coz the government are taking care of this matter. Like China, they just shut down a lot of exchange whose not accredited by their regulatories and is accountable for various fraudulent and illegal activities involving cryptocurrencies. Indeed cryptocurrency greatly helps the economy but it does not end there, just like hacking even you upgrade the system there will be always a hole to sight.

I think it is very possible that cryptocurrency is used for money laundering. This is because the anonymous nature of cryptocurrency makes the owner of cryptocurrency very difficult to track the source of funds used.

Even though some exchanges have used the KYC method to avoid this, but if it is entered in the wallet I think it is very difficult to be able to trace the source of funds generated by the owner of the wallet itself

With the advent of technology, and the fast and vast spreading of information, it is very much likely for people, organization, business tycoons, and money laundering operators to utilize bitcoin as a storage for their money. As their cash is converted to cryptocurrencies, they have the chance to shift funds to numerous people, or to other entities. This, however happens most likely in other countries.
Since there is no single administrator or moderator for this, money launderers could utilize this opportunity to mazimize their assets more without being checked by the government.

it depends on how much money he/she will wash. without even having to do face-to-face meetings, they can do it on several exchanges. although there is a small fee, but I think it's still worth it. I'm pretty sure there are people who take advantage of the advantages of bitcoin/altcoin like this. however, the KYC system allows the exchanger to know the person making the transaction, but until now there is still a flaw in the system.

Actually doing a transaction like this is very easy to trace, especially if you have connections with friends / 3rd party people who cannot maintain client confidentiality.
Change your cash into cryptocurrency have to option, buy it direct from exchange which also in this case KYC will be needed and by people who has the same amount of cryptocurrency you will need to convert. About authorities will trace your transaction i think it depends on how exchange will react on your transaction, if they think your transaction is suspicious maybe the authorities will try to trace it

Pues eso es algo muy común hoy en dia, hasta en las peliculas algunas veces asemejan el uso del bitcoin con el lavado de dinero. Pero en todo mercado siempre suelen hacer estas practicas, fijate no más en la bolsa de valores (https://zoneforex.info/inversiones/que-es-la-bolsa-de-valores-y-como-funciona), ahí se suelen mover los grandes capitales y uno nunca sabe la procedencia de estas inversiones.

Saludos

In our national news in my country, Bitcoin rarely appears on the national television and I recall the time where millions of amount in our currency had been laundered by a group of people which they use Bitcoin as mode of transferring this money and accumulating the amount but in the end they were caught by the authorities which proves that the government had established a certain way to track down this abusive people and for the justice to be delivered.

I read some news in media about cryptocurrencies being used for money laundering, even for terorrism financing. How much of that is true or proven I don't know but it puts a bad light on cryptocurrencies. However, we need to have in mind that anonimity and lack of regulation contribute to misuse of cryptocurrencies but that is not characteristic only for crypto, fiat is abused too.

The money laundering/terrorism financing is much more a problem in regards to fiat currencies (especially US dollar) than cryptocurrencies as speaking of its size. We are speaking about (estimated) more than 1.99 billion USD in total per year. Out of which maybe 1-2% max is cryptocurrencies.

Do you think exchanges (http://okex.com) get hack is an accident? it's an inside job bro.

Bitcoin is decentralized so this is possible. I've been hearing or reading about drugs being paid through Bitcoin so money laundering is not an exemption. The government is unable to track activities like these, so it's probably one of the reasons why the government is so against crypto.

Because of there are still no regulations using cryptocurrency is a very common way of money laundering. Some time ago I found out that there are Bitcoin mixers (or tumblers) which "purportedly clean dirty cryptocurrency by bouncing it between various addresses, before recombining the full amount through a Bitcoin $BTC wallet hosted on the dark web". So as you can see that case is very serious and well known among people. What's more, there are companies like Coinfirm which is a leader in Anti Money Laundering and risk analytics for blockchain and cryptocurrencies so maybe in the future such crimes will be prevented. It's pretty interesting topic, you can find more detailed information on their website: https://www.coinfirm.com/blog/coinfirm-releases-new-standard-aml-risk-reports-for-cryptocurrencies

Well, with an anonymous utility, crypto is clearly a useful vehicle for money laundering and more or less, people who want to launder money have been looking to crypto for a long time since it came out, and this may be a bad point for crypto in the eyes of outsiders but we are in the world of crypto. This obviously benefits us when we can see how well the crypto works implicitly, the government also has no control, income will not be monitored by the government and the transfer process will not cost too much or be doubted

Yes, a lot. But still, in 98% of cases, fiat is used for money laundering.

Just few people do not know whit bitcon working to get much money can scam by some person try to get ponzi site with bitcoin name, I think when many people have know how bitcoin site give profit for investor they will not trusted again with ponzi site label their project with bitcoin or altcoin, when know how to get profit with bitcoin without how many percent a month they will understand with bitcoin and altcoin investing.

that is one use of crypto for bad things, or commonly called abuse. but again that crypto does have an anonymous nature and some people use it for money laundering, and this news is quite a lot. but those of us who understand the concept of crypto might still use it, whereas new people will think more badly about crypto