Who need bitcoin to launder money when you have...

[tinus42]

What's strange about 500 euro bills? We had 1000 Guilders bills before (about 450 euro). Anything above 50 euro is seldom used though and not accepted at most places besides banks. No ATM I've been to in the Netherlands has ever spit out anything above a 50 euro bill.

And the Swiss? They need to pay with 1000 CHF bills because that is the price of the average drink in the capital. (just kidding, it is really expensive though )

I got a 100 euro note once and no shop would accept it except the Albert Heijn supermarkets. I tried changing it at my bank first but they only would put it in my account, not change it. Since I was in the red back then and needed the cash I ended up buying a cheap item at Albert Heijn with a 100 euro bill. Which was a bit embarrassing but the cashier accepted it without making a remark.

[tinus42]

They can always use this:



Much smaller...  

I have 15 of those. So I'm a quadrillionaire.

[rumbitla]

...the 500 EURO note  - AKA  the "Bin Laden"



http://www.bloomberg.com/news/2010-04-19/500-euro-bill-lifts-crime-terror-tax-risk-bank-of-italy-says.html

When Russia arrested this US CIA spy lately, he had a stash of Bin Ladens on him too.

The man, Ryan C. Fogle—is that his real name? And did he really go spying about in Moscow carrying his real ID and embassy papers? While also carrying wigs and other disguises? Oy vey!—was nabbed with stacks of 500-euro notes and a written pledge to give $1 million to an informant (i.e., a spy) he was trying to recruit.

http://www.thenation.com/blog/174317/cias-russia-spy-flap-dumb-and-dumber

[Snail2]

Well I must admit I'm using bitcoins for "domestic money laundering". It's a good way to channel trough my "pocket money", make some extra income AND hide it from my wife's watching eyes, before she can turn it to shite  . (Sometimes literally. Few month ago I've sold my old mobile phone on ebay and when the payment arrived she spent it on horse and chicken manure "for the strawberries".)

[hf]

(Sometimes literally. Few month ago I've sold my old mobile phone on ebay and when the payment arrived she spent it on horse and chicken manure "for the strawberries".)

Yep, that's quite the opposite of "domestic laundering".

[BCB]

Now that's funny!

[ph111]

    You are not allowed to buy or sell 500 euro notes in the U.K, the goverment banned them, maybe bitcoin next if they get there way !!
    Im giving the UK goverment a scam accusation !!

[moni3z]

Canada still has some $1,000 bills still floating around, the government panicked and stopped issuing them, the highest note is $100 now but you can still use the $1,000 bills

Drug dealers here use hundreds of nail and hair salons and other service/cash based businesses to launder their millions per month. They don't need bitcoin, high valued bills or anything besides a lawyer and a few businesses that accept cash.

In fact a local biker gang runs a supermarket, multiple automotive shops and every single strip bar here. They don't need bitcoin either. There's also government run casinos where you can walk in, drop $10,000 in cash for chips, make one bet for $1 on a blackjack table and go cash it out, money completely laundered as there's no tax on gambling winnings here.

If you drive across the Mexican border the first thing you see is a bunch of brand new banks all laundering epic cartel profits. Should probably go after them and not bitcoin

[BCB]

Canada still has some $1,000 bills still floating around, the government panicked and stopped issuing them, the highest note is $100 now but you can still use the $1,000 bills

Drug dealers here use hundreds of nail and hair salons and other service/cash based businesses to launder their millions per month. They don't need bitcoin, high valued bills or anything besides a lawyer and a few businesses that accept cash.

In fact a local biker gang runs a supermarket, multiple automotive shops and every single strip bar here. They don't need bitcoin either. There's also government run casinos where you can walk in, drop $10,000 in cash for chips, make one bet for $1 on a blackjack table and go cash it out, money completely laundered as there's no tax on gambling winnings here.

If you drive across the Mexican border the first thing you see is a bunch of brand new banks all laundering epic cartel profits. Should probably go after them and not bitcoin

Very interesting.  How does the nail/hair salon laundering work?

(fuck bitcoin... I'm joining a biker gang! unfortunately I'd probably have to come out of my basement for the initiation.)

[moni3z]

Very interesting.  How does the nail/hair salon laundering work?

(fuck bitcoin... I'm joining a biker gang! unfortunately I'd probably have to come out of my basement for the initiation.)

Easy, you get a lawyer to set up shell holding companies with obfuscated directors that then buy/lease nail salons or other cash based businesses. Then you hire employees for real customers but your gang crony runs the books, and at the end of the day you fill the books with cash drug money for services that never happened and get your lawyer to whittle down the corporate tax to nearly nothing. If you max out the store income where they might start asking questions just keep opening up more stores.

If anybody lives in Vancouver walk down Kingsway St and note there is viet nail salons as far as the eye can see side by side, and hair salons, and spas. $300-800 spa treatments, multiplied by 80 fictional customers per day including the profit from the 20-40 or so customers you actually had is about a million dollars per month. Now open up twenty more stores and your coke and heroin windfall profits have a place to go.

[BCB]

Very interesting.  How does the nail/hair salon laundering work?

(fuck bitcoin... I'm joining a biker gang! unfortunately I'd probably have to come out of my basement for the initiation.)

Easy, you get a lawyer to set up shell holding companies with obfuscated directors that then buy/lease nail salons or other cash based businesses. Then you hire employees for real customers but your gang crony runs the books, and at the end of the day you fill the books with cash drug money for services that never happened and get your lawyer to whittle down the corporate tax to nearly nothing. If you max out the store income where they might start asking questions just keep opening up more stores.

If anybody lives in Vancouver walk down Kingsway St and note there is viet nail salons as far as the eye can see side by side, and hair salons, and spas. $300-800 spa treatments, multiplied by 80 fictional customers per day including the profit from the 20-40 or so customers you actually had is about a million dollars per month. Now open up twenty more stores and your coke and heroin windfall profits have a place to go.

Moni3z that is fucking Genius!

Here is NYC There are fucking Nail Salons on every fucking block.  I never understood how a nail salon could afford the crazy rents for ground floor and cornor business along Broadway in NYC.  One I used to walk by one every day and I swear half the time the entire staff was just sitting around talking out looking out the window.

Now I know!

[desired_username]

Semi related:

In my country, the main money laundering activity besides the already mentioned "services for cash" is sports.

Basically, there are gangsters flooding all aspects of the sport world from boxing to motorsports. They have racing teams and do money laundering for a 80-90% return of the "advertising" money for example. All of them has ties to politicans so it's impossible to get them arrested.

If you look around and watch you'll see corruption to the highest levels... :S

[threeip]

Here is NYC There are fucking Nail Salons on every fucking block.  I never understood how a nail salon could afford the crazy rents for ground floor and cornor business along Broadway in NYC.  One I used to walk by one every day and I swear half the time the entire staff was just sitting around talking out looking out the window.

Now I know!

BCB I expected more from you He's right though!

[kik1977]

The article is flawed because it mixes 2 very different issues. The first one is about money laundering and the second is about the underground economy. Bitcoin and large bank notes are good for the second, but not for the first. Excuse-me, but if you go to any bank in the world with a suitcase full of cash, you will look very suspicious.

Isn't the key about money laundering that you DON'T go straight to a bank?  I.e, you give it to your car-wash owning friend to handle, who then slowly trades them for the notes that the customers bring in, and deposit the 100's as revenues while giving the smaller untainted notes back to the one wanting the laundry done?

Not reallt, Spike! This way you still have the same amount of money as before and no legitimate origin for it. The point of ML is exactly that, trying to give your dirty money a legitimate origin. Moni3z correctly explained one of the many different ways in his nail/hair salon example.

A ML scheme using bitcoins will basically follow the same path of a "normal" one, but using BTC you will have some additional advantages: no bulky suitcases full of cash or heavy gold bullions to be moved, no border controls, quick transactions and, depending on the criminal's ability, an hard time for the investigators to trace the ownership of the transactions.

In my humble opinion, Bitcoin still lacks a small (or huge) step to be really attractive to money launderers: a bigger monetary base. But in a few years the value of bitcoins in circulation could be big enough to allow serious amount of money (>1,000,000 USD) to be laundered effectively. Right now, trying to buy 5-10.000.000 USD for ML purpouses would take too much time or would drive down the price, so it's still not possible I guess.

[Sukrim]

I guess there are 2 different kinds of things to consider here:

1) "Dirty money" in the sense of tracked money (yes, serial numbers can be traced/tracked too) - this is probably similar to stolen jewellery, so you have something that can be easily linked to a crime and provably so. In this case it would make sense to switch a 100 USD bill for 2 untracked 50s. I guess the most widely used use case though would be counterfeit money - and with that you might have quite some problems in depositing it at a bank, gas station or not.

2) "Dirty money" in the sense of anonymous bills from illegal sources. To make this money "reappear" in the banking system, it needs a source. This is what the various "legal" businesses provide, not "clean cash" (that's what you already have... but you don't just want to be able to spend a few hundred per month extra - you want your millions on your swiss bank account!).

[moni3z]

With bitcoin you can easily conceal the source and just run a fake hosting company or phony software dev site and cash as much drug money as you want. No way to prove you didn't sell software, plus with NDA's and corporate rights you play the system at their own game.

It's still a drop in the ocean of laundering compared to the millions in cash that cross the US border into Mexico every single day hidden in semi trucks. Here's a good pdf outlining the techniques cartels use to distract border guards with decoys while their trucks full of illegal shit sails straight through http://www.all-about-psychology.com/support-files/drug_smuggling_part_2.pdf after reading that you'll realize what a wasted effort the entire war on drugs/laundering is. It's actually laughable to think they would go after Bitcoin for laundering when there's rows of corrupt banks washing billions for the cartels just across the border.

[BCB]

Bitcoin market value is currently about $1.2B USD

The OCC reported multiple failings on the part of HSBC in 2010 to implement anti-money laundering measures, namely its failure to monitor $60 TRILLION in bank transfers and 17,000 account alerts detailing suspicious activity.

[FeedbackLoop]

Bitcoin market value is currently about $1.2B USD

The OCC reported multiple failings on the part of HSBC in 2010 to implement anti-money laundering measures, namely its failure to monitor $60 TRILLION in bank transfers and 17,000 account alerts detailing suspicious activity.

I'm surprised this topic reached page 2 before HSBC was mentioned.

Indeed who needs "bin ladens" or whatever when you have HSBC? The UK banning the 500s is just for show.

(Also keep in mind that HSBC was just the tip that we got to hear about, and there was barely any noise about it in "the media". ) 


 

[BCB]

Speaking of HSBC here is Max Keiser's opinion of SR and money laundering.



http://youtu.be/PmfEGtWkv-U

[Phinnaeus Gage]

They can always use this:



Much smaller...  

Is it just me or does the pile of rocks resemble a troll. Notice the eyes, nose and downward smile in the top rock.

I also see teeth and a tongue

The middle rock, I see a tie.