Can Bitcoin exchange be considered as money laundering?

[JB0011]

In my country, Bitcoin is neither legal nor illegal. So I don't know what Bitcoin exchange in this country means. Suppose, you are in another country. You buy BTC there (let's say $1000 worth). Later, you come back to your country and sell BTC (on Localbitcoins) and get your local currency in your bank. You technically didn't bring the money into the country through a proper channel. Or suppose, you earn online (freelancing or whatever) and get paid in BTC. Then you sell that BTC on localbitcoins and get your local currency. You technically didn't bring the money into the country through a proper channel. Can these exchanges be viewed as money laundering by authorities in your country where Bitcoin is neither legal nor illegal? If your answer is that it is not money laundering, how can you prove to authorities that what you did is NOT money laundering?

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[Youresioure]

Your example includes fiat so I'd consider the act in your example money laundering. In spite of that thought, I think bringing money as Bitcoin into the country and using it as Bitcoin from crypto currency adaptors isn't an act that I consider money laundering. Crypto to crypto exchanges could fall in the same safe category. I'd start to worry when the transaction'd appear in a fiat balance.

[odolvlobo]

Perhaps you could learn a little more about money laundering. Here is a definition:

The process of taking the proceeds of criminal activity and making them appear legal.

It doesn't specifically refer to moving money between countries.

[Meuh6879]

Exchange block access when you don't follow the KYC and AML regulation.





Exchanges are not money clean machine ... at all.

[Doamader]

The only problem here is usually when you exchange money from other country you must pay a tax and the company should declare those transactions, localbitcoins arent nothing else then a individual business where anyone may buy or sell bitcoins, i dont see it as laundering, you arent making anything to cover where the money camed, you are earning bitcoin, getting paid and exchange it to your bank.

[JB0011]

Your example includes fiat so I'd consider the act in your example money laundering. In spite of that thought, I think bringing money as Bitcoin into the country and using it as Bitcoin from crypto currency adaptors isn't an act that I consider money laundering. Crypto to crypto exchanges could fall in the same safe category. I'd start to worry when the transaction'd appear in a fiat balance.

I understand what you are saying, but I think it's not making much sense. What I mean is, what difference does it make if you are spending in local currency or spending in btc? Btc isn't accepted in your local grocery stores, fuel stations, movie cinemas etc. so you have to exchange it to your local currency. From what you said, I think either both should money laundering or neither.

The only problem here is usually when you exchange money from other country you must pay a tax and the company should declare those transactions, localbitcoins arent nothing else then a individual business where anyone may buy or sell bitcoins, i dont see it as laundering, you arent making anything to cover where the money camed, you are earning bitcoin, getting paid and exchange it to your bank.

Yes, you're making sense and that's what I was thinking myself. You work online, get paid in PayPal, you get the withdrawn to your bank account. Now blockchain doesn't offer a withdrawing to your bank service so you use a third party (from localbitcoins) to get it withdrawn to your bank. Sort of like barter system. Digital barter system.

[shinratensei_]

IMO, the exchanges can be considered a little mixing, because some exchanges service are offering the features sending or depositing the money with the various address. all of the elements in the crypto are susceptive to be tools for money laundering.

[Hazir]

I want to ask you something Op, have you ever heard about term called "tax optimization"? What is your stance on this phenomena?
As far as I know this is not forbidden to move your business to another country or so called tax haven, you have no problem with that?

As for exchanges, bitcoin, buying, selling - as you said - bitcoin is not exactly regulated so, this rule is all we got: Nullum crimem sine lege.

[zahra4577]

In my country, Bitcoin is neither legal nor illegal. So I don't know what Bitcoin exchange in this country means. Suppose, you are in another country. You buy BTC there (let's say $1000 worth). Later, you come back to your country and sell BTC (on Localbitcoins) and get your local currency in your bank. You technically didn't bring the money into the country through a proper channel. Or suppose, you earn online (freelancing or whatever) and get paid in BTC. Then you sell that BTC on localbitcoins and get your local currency. You technically didn't bring the money into the country through a proper channel. Can these exchanges be viewed as money laundering by authorities in your country where Bitcoin is neither legal nor illegal? If your answer is that it is not money laundering, how can you prove to authorities that what you did is NOT money laundering?

Since you bought them and not acquired bitcoin through illegal ways,it is not money laundering because you already have converted your local currency to USD to buy btc

[JB0011]

I want to ask you something Op, have you ever heard about term called "tax optimization"? What is your stance on this phenomena?
As far as I know this is not forbidden to move your business to another country or so called tax haven, you have no problem with that?

As for exchanges, bitcoin, buying, selling - as you said - bitcoin is not exactly regulated so, this rule is all we got: Nullum crimem sine lege.

I personally have no issues with that. As far as I know, that is perfectly legal.

And the rule you mentioned, that makes a lot of sense.

Since you bought them and not acquired bitcoin through illegal ways,it is not money laundering because you already have converted your local currency to USD to buy btc

What if you are freelancing and earning in BTC and then getting it exchanged to local currency?

[mindrust]

You can't turn any illegal money into legal money with exchanges so the answer is no.

You do the job before you get to exchanges. The TV show "Breaking Bad" explains money laundering very well, you should look into it. Great show.

[pawel7777]

In my country, Bitcoin is neither legal nor illegal. So I don't know what Bitcoin exchange in this country means. Suppose, you are in another country. You buy BTC there (let's say $1000 worth). Later, you come back to your country and sell BTC (on Localbitcoins) and get your local currency in your bank. You technically didn't bring the money into the country through a proper channel. Or suppose, you earn online (freelancing or whatever) and get paid in BTC. Then you sell that BTC on localbitcoins and get your local currency. You technically didn't bring the money into the country through a proper channel. Can these exchanges be viewed as money laundering by authorities in your country where Bitcoin is neither legal nor illegal? If your answer is that it is not money laundering, how can you prove to authorities that what you did is NOT money laundering?

What does "neither legal nor illegal" even mean? If it's not declared illegal, then it's legal. I assume you meant 'unregulated', with no clear guidance of whether it's treated as asset or currency etc.

In such case, the only thing you can do is to enquire directly with relevant authority (i.e. your local tax office), telling them what do you intend to do and asking to clarify on  whether it's allowed and if so, how is it taxed.

[Maesters1-]

as bicoin has not yet given any statement about bitcoin that either it is legal currency or illegal, therefore we cannot consider it as money laundering, i think it is a legal transaction,

[StoreBit]

i think yes if you are transferring the money illegally from one stat to another using bitcoin as the medium of transferring money then it is really illegal for and can e conisider as money laundering.

[Hoor]

i think know because bitcoin is not use consider illegal by any country so using bitcoin for money transaction is legal therefore bitocin exchange can also be consider as legal.

[satdas]

very honestly yes, i think it will really be consider as money laundering,  and the reason is that most of the countries have not yet consider bitcoin as legal currency and still there is no tax on bitocin so if one is using it money transaction then it will certainly be consider as illegal activity . and will certainly be consider as money laundering.

[ethereumhunter]

i think it can be possible but its depend on bitcoin exchange itself and i think there are no bitcoin exchange will do that because if they do that, they risk their business with their member and their business will not stay for long.

[The Sceptical Chymist]

I think you could do it, by buying altcoins and switching back and forth--it's been discussed here before.  However as mentioned, the KYC regulations should take care of such things. 

I'm wondering when the law is going to catch up with the sketch exchanges like Yobit, and what they could have done with Cryptsy and Gox and Bittrex.  We're definitely still in the wild west territory.  But being considered money laundering?  Nah, not at present.

[HanSchultz]

stock market is used to launder money and there might be people who use crypto exchanges to launder money ,it is really difficult to monitor these activities ,the best thing you can do is to collect your customers details and verification for transactions

[Snorek]

Why do we care so much about bitcoin laundering money schemes when the worst money laundering operation in history was conducted by FIAT  Banks?
Banks and official institutions had washed more dirty money that bitcoin probably ever will.

Just one HUGE example: http://www.businessinsider.com/gods-bankers-financial-scandals-at-the-vatican-2015-2?IR=T