[2017-10-25] DEA Report: Bitcoin Used for Trade-Based Money Laundering

[gokayc]

A new report from the U.S. Drug Enforcement Administration (DEA) claims that bitcoin is being used to facilitate trade-based money laundering (TBML) schemes.

Published by the Department of Justice, the report offers a broad overview of the U.S. government's efforts to police the illicit drug trade. Included in the study, however, is a segment on cryptocurrencies, which notably states that criminals who launder funds through trading operations are using bitcoin, particularly firms based in China.

The DEA wrote:

    "...many China-based firms manufacturing goods used in [trade-based money laundering] schemes now prefer to accept bitcoin. Bitcoin is widely popular in China because it can be used to anonymously transfer value overseas, circumventing China's capital controls."

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The claim aside, the report doesn't contain any specific figures on how much money is being laundered through this means. But it does detail efforts to obtain bitcoin holdings through regulated exchanges, stating that China-based groups prefer using the cryptocurrency in an effort to bypass capital controls.

Elsewhere in that section, the paper's authors argue that over-the-counter (OTC) bitcoin brokers are helping to facilitate these cross-border transactions – a trend they write will continue.

"The increasing use of OTC bitcoin brokers, who are capable of transferring millions of dollars in bitcoin across international borders, as part of a capital flight scheme is expected to continue to intertwine criminal money laundering networks with capital flight," the report states.

https://www.coindesk.com/dea-report-bitcoin-used-trade-based-money-laundering/?utm_content=buffer95b50&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

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[iamTom123]

There is no contest in here as we all know that Bitcoin has been used by many criminals to circumvent the law and maybe evade government authorities. However, the thing is that USA Dollar has had been used too but since Bitcoin is something new in the block it is being highlighted and the dollar (as well as other forms of currencies) are relegated to the background. This is not the problem of Bitcoin alone but by all the currencies we are using because any money can be utilized by anybody. Should we then control Bitcoin because criminals have been utilizing it on their trades? Well, if we can also control the dollar then maybe that can have no problem with me at all. Just to be fair. But will they? Of course, the won't touch the dollar giving us the hint of being biased against Bitcoin. What these agencies do is to formulate an effective system of monitoring and networking so that whatever currencies these criminals are using they can apprehend them and bring them into the hands of the law.

[ivan_80]

Another non-argument from a government agency. If Bitcoin can be used for both legal and illegal activities, then that makes it no different from any existing fiat currency or works of art, precious metals, shares and any imaginable value-transfer token in this regard.

[BurtW]

In the so called "evidence" used to get the sealed warrant for my arrest under the Patriot act the government's view of Bitcoin was expressed as "there are little or no legal reasons for using Bitcoins".  So from their point of view the simple fact you are a Bitcoin user or enthusiast can be used to start an investigation into all of your activities.

[franco123]

Well this is not new nor surprising.The government has always made this the main reason why they think Bitcoin should be regulated and monitored. We can not blame them also on this kind of matters as it true, Bitcoin is being used for illegal trading and money laundering. It is meant to have free and anonymous transactions that is why criminals are taking advantage the use of it.

But I dont think these criminals will not or will stop operating their illegal activities if Bitcoins is banned or regulated. They will still find a way. The action is to rewlly seize them, the criminals, and not Bitcoins.

[bubblebit]

The US government has the right and the power to check this and interfere in this kind of transactions. But I doubt they do it for a good intention. China and Bitcoin is it coincidence they’re throwing bad image to both of this that they really hate. Does china alone or does America picking those because as I always said the biggest drug users are on that place is the one investigating.

[1Referee]

Who cares? Everything that's being said applies to fiat as well, but no one is talking about that? Oh wait, it's Bitcoin, so they have to point out the tool that's being abused for 'malicious' acts. Is this 2013 where news articles with similar content were a common occurrence? I thought that we moved forward so much, that this nonsensical talk was not going to be seen much anymore by now. Oh well, perhaps I was just too optimistic to think that government agencies would actually understand that it's never the tool that should be blamed. They know how to seperate things when it comes to fiat, but Bitcoin is still a bit too much for them to handle equally. I am at least glad that the general understanding of Bitcoin is more and more increasing, which basically means that these type of articles won't have much of an impact on average joes anymore.