4 ms·

It sounds to me that Bitcoin is a lousy medium for money laundering. It's unclear to me whether they laundered money by supposedly buying and selling bitcoins o

by yason 11y ago

It sounds to me that Bitcoin is a lousy medium for money laundering. It's unclear to me whether they laundered money by supposedly buying and selling bitcoins or converted shadowy assets into BTC and then back to physical currency, but in both cases the transactions can be tracked back in the blockchain so you'll not only have to make a good story of where the money came from but also, if and when the authorities get interested, make sure that how the BTC is moved around reflects that story. But merely converting BTC to cash via ATMs doesn't even sound like laundering to me at all, just conversion. You would still need to explain the cash you've acquired if you intend to buy something with it. Money laundering itself is not for those in a hurry. To plausibly launder money you need a service business with costs that are rather fixed and customers who can plausibly pay with cash. Then you can have as many "customers" as you like and nobody can really tell how many you really might have had but depending on how you set up the scheme you can report a reasonable income over the months and years, pay the taxes and thus turn the money legally earned.

arianvanp 11y ago
Yeh, sadly enough the Dutch media and government try to totally hide this in their stories. Bitcoin == Money laundering, and TOR == THE DARK WEB. Period. [0] The article is full of misdirections and word plays. It starts of with "Bitcoin is used by criminals, because the currency is not controlled by banks and thus there is no supervision". This is the first misdirection, because just because it's not controlled by banks doesn't mean you cannot supervise it. The core idea of bitcoin _is_ supervision. It's a public ledger. It then continues to support their argument by saying "Bitcoins go back and forth in a _closed_ system of users, so authorities can't see it". Which is just a plain lie. Bitcoin is an _open_ system. Anyone can see any transaction. The article continues: "As soon as the bitcoins were turned into real cash, the money was turned into cash at banks. They finally stepped to the police, because their warning systems detected large amounts of money being transferred". So apparently it _was_ really easy to track down? They detected the weird transfers and were able to find the criminals. Seems bitcoin actually saved us here? That totally is the opposite of what they told us two paragraphs back where they said "there is no insight at all in what happens with bitcoin" The article then continues to mumble about how TOR == Dark web and it's just painful to read. I hate media. Now my mom starts asking me akward questions about hard drugs because I have a TOR and a Bitcoin sticker on my laptop. [0] http://nos.nl/artikel/2081531-bitcoins-en-dark-web-een-goed-huwelijk.html http://nos.nl/artikel/2081531-bitcoins-en-dark-web-een-goed-...
- SixSigma 11y ago
  Shows how far it has come though, when moms have awareness of Tor & Bitcoin at all.
- icebraining 11y ago
  The idea that money laundering can happen in Bitcoin because it's not controlled by banks is particularly good. Maybe we should get a large, trusted bank like HSBC to regulate Bitcoin? Oh, wait: https://en.wikipedia.org/wiki/HSBC#Money_laundering https://en.wikipedia.org/wiki/HSBC#Money_laundering
  - hackerboos 11y ago
    So HSBC were fined $1.9 billion by US regulators and 40 million Swiss francs by Swiss regulators. Who do we fine for money laundering on the blockchain?
    - icebraining 11y ago
      The people who were arrested, as per the article in discussion?
- lunchTime42 11y ago
  Makes you wish there was a accountability on journalism side for what writers produce. Imagine a information overlay that filters out authors who wrote many propaganda pieces and fear mongerism.
  - superuser2 11y ago
    Reputable newspapers in the 20th century employed armies of professional editors. Holding reporters accountable for their claims, keeping them from overstating, etc was their daily grind. Corporate culture deliberately separated them from the business side of the organization. They called it "Church and State." When the Internet decimated newspapers, owners realized they could could lay off all the editors (QA) without any short term financial downside. So they did. Church and State is now a relic, except to some degree at a few bastions of old-school journalism like NYTimes. A high quality newsroom is an expensive thing. Internet ad revenues alone generally do not support them.
mdw 11y ago
Why is BitCoin often associated with money laundering, as you say: > but in both cases the transactions can be tracked back in the blockchain It seems to me BitCoin can actually aid law enforcement in tracking down money laundering!
- IkmoIkmo 11y ago
  > Why is BitCoin often associated with money laundering, as you say: Because it's the 'unique' element of the story. i.e., a million money laundering and fraud schemes are reported on every year, but the specific currency isn't mentioned. No article states 'ten arrested over dollar money-laundering allegations'. But if it's bitcoin, it's interesting to mention. It's quite similar to how say minorities are reported on when it comes to criminal news, in my country for example you'll never hear '5 white men robbed a person', but if it's an immigrant, a muslim, a refugee, it's much more likely that somewhere his heritage is reported. Because it's exactly this element that separates them from the 'regular' news of the majority ethnicity. In the same way, bitcoin is the element that separates it from the regular money laundering news, so it's highlighted in the reporting. None of it is untrue, but it's quite easy to appreciate how this frames the issue. Anytime there's financial fraud in dollar-denominated accounts, it's 'just financial fraud', when it's in bitcoin it's not 'just financial fraud' but 'bitcoin fraud'. So now you have a world in which majority currencies aren't specified or highlighted in negative reporting, but minority currencies are. For example, the article is on the Netherlands, in this particular case about $20m is estimated to have been involved, part of it laundered through bitcoin, part of it through various fiat currencies and luxury goods. Is $20m significant? Well let's go back 6 years to 2010, when a bitcoin costed $0.04 (today around $400) and was virtually non-existent. At the time the Netherlands invested about $100m into improving the ability to track and prosecute money-launderers. (already you can see, if a government invests $75m to fix a problem, you can be rest-assured that $20m is a tiny part of the problem). At the time the police also estimated that in the Netherlands alone about $20 billion was laundered. As such, this bitcoin laundering case, the first of this magnitude I'm aware of in the Netherlands in years, consists of just 0.1% of the annual money laundering.
- ryanlol 11y ago
  >It seems to me BitCoin can actually aid law enforcement in tracking down money laundering! Not really. Bitcoins biggest weakness for money laundering is a very low market cap, the blockchain doesn't really help much against basic money laundering techniques.
braythwayt 11y ago
Hairdressers, barbers, restaurants, corner stores, garages, and nail salons. High-volume, cash businesses.
- extra88 11y ago
  Ahem, car washes. http://breakingbad.wikia.com/wiki/A1A_Car_Wash http://breakingbad.wikia.com/wiki/A1A_Car_Wash
patio11 11y ago
Then you can have as many "customers" as you like and nobody can really tell how many you really might have had Note that, for this and related reasons, the IRS guides on examining car washes and laundromats (yes, these documents both exist and are publicly available) says to find their water bill from the business' books, look up the price of water in the area, Fermi estimate the amount of legitimate business happening, and compare with reported revenue. If a wash costs $1 and you use 250k washes worth of water but report $60k in gross receipts you're evading taxes; if you report $6 million in gross receipts you're laundering more than underwear. (A technique with similar impact is "compare with a selection of similarly situated businesses in your files.")
- lifeisstillgood 11y ago
  The U.K. Version of this was to count the number of tinfoil boxes purchased and delivered to the Chinese / Indian / Mexican takeaway and divide by the number of reported meals. While amusing it is one of those depressing things to realise that in a decade or two lying will become almost impossible to get away with. I suspect this will have an impact on human society
  - gherkin0 11y ago
    Couldn't that be gamed pretty easily by buying the takeout boxes and then selling them again under the table to a legitimate business?
    - mattmanser 11y ago
      Buying them and junking them would be far safer. Otherwise whoever you're selling them to will be investigated for money laundering and that could lead back to you.
    - JupiterMoon 11y ago
      Or just buying them and throwing them away.
    - lifeisstillgood 11y ago
hackerboos 11y ago
Zerocoin/Zerocash now Zcash will likely make laundering money in far easier than Bitcoin makes it: http://www.wired.com/2016/01/zcash-an-untraceable-bitcoin-alternative-launches-in-alpha/ http://www.wired.com/2016/01/zcash-an-untraceable-bitcoin-al...
- cyphar 11y ago
  The point of Zcash is to make the sender anonymous. The receiver is not, for taxation (and traceability) reasons. So, money laundering will not be easy because you'd have to explain why you suddenly got a large amount of money that doesn't match with any business you run.

by yason 11y ago

arianvanp 11y ago

Yeh, sadly enough the Dutch media and government try to totally hide this in their stories. Bitcoin == Money laundering, and TOR == THE DARK WEB. Period. [0] The article is full of misdirections and word plays. It starts of with "Bitcoin is used by criminals, because the currency is not controlled by banks and thus there is no supervision". This is the first misdirection, because just because it's not controlled by banks doesn't mean you cannot supervise it. The core idea of bitcoin _is_ supervision. It's a public ledger. It then continues to support their argument by saying "Bitcoins go back and forth in a _closed_ system of users, so authorities can't see it". Which is just a plain lie. Bitcoin is an _open_ system. Anyone can see any transaction. The article continues: "As soon as the bitcoins were turned into real cash, the money was turned into cash at banks. They finally stepped to the police, because their warning systems detected large amounts of money being transferred". So apparently it _was_ really easy to track down? They detected the weird transfers and were able to find the criminals. Seems bitcoin actually saved us here? That totally is the opposite of what they told us two paragraphs back where they said "there is no insight at all in what happens with bitcoin" The article then continues to mumble about how TOR == Dark web and it's just painful to read. I hate media. Now my mom starts asking me akward questions about hard drugs because I have a TOR and a Bitcoin sticker on my laptop. [0] http://nos.nl/artikel/2081531-bitcoins-en-dark-web-een-goed-huwelijk.html http://nos.nl/artikel/2081531-bitcoins-en-dark-web-een-goed-...

SixSigma 11y ago
Shows how far it has come though, when moms have awareness of Tor & Bitcoin at all.
icebraining 11y ago
The idea that money laundering can happen in Bitcoin because it's not controlled by banks is particularly good. Maybe we should get a large, trusted bank like HSBC to regulate Bitcoin? Oh, wait: https://en.wikipedia.org/wiki/HSBC#Money_laundering https://en.wikipedia.org/wiki/HSBC#Money_laundering
- hackerboos 11y ago
  So HSBC were fined $1.9 billion by US regulators and 40 million Swiss francs by Swiss regulators. Who do we fine for money laundering on the blockchain?
  - icebraining 11y ago
    The people who were arrested, as per the article in discussion?
lunchTime42 11y ago
Makes you wish there was a accountability on journalism side for what writers produce. Imagine a information overlay that filters out authors who wrote many propaganda pieces and fear mongerism.
- superuser2 11y ago
  Reputable newspapers in the 20th century employed armies of professional editors. Holding reporters accountable for their claims, keeping them from overstating, etc was their daily grind. Corporate culture deliberately separated them from the business side of the organization. They called it "Church and State." When the Internet decimated newspapers, owners realized they could could lay off all the editors (QA) without any short term financial downside. So they did. Church and State is now a relic, except to some degree at a few bastions of old-school journalism like NYTimes. A high quality newsroom is an expensive thing. Internet ad revenues alone generally do not support them.

mdw 11y ago

Why is BitCoin often associated with money laundering, as you say: > but in both cases the transactions can be tracked back in the blockchain It seems to me BitCoin can actually aid law enforcement in tracking down money laundering!

IkmoIkmo 11y ago
> Why is BitCoin often associated with money laundering, as you say: Because it's the 'unique' element of the story. i.e., a million money laundering and fraud schemes are reported on every year, but the specific currency isn't mentioned. No article states 'ten arrested over dollar money-laundering allegations'. But if it's bitcoin, it's interesting to mention. It's quite similar to how say minorities are reported on when it comes to criminal news, in my country for example you'll never hear '5 white men robbed a person', but if it's an immigrant, a muslim, a refugee, it's much more likely that somewhere his heritage is reported. Because it's exactly this element that separates them from the 'regular' news of the majority ethnicity. In the same way, bitcoin is the element that separates it from the regular money laundering news, so it's highlighted in the reporting. None of it is untrue, but it's quite easy to appreciate how this frames the issue. Anytime there's financial fraud in dollar-denominated accounts, it's 'just financial fraud', when it's in bitcoin it's not 'just financial fraud' but 'bitcoin fraud'. So now you have a world in which majority currencies aren't specified or highlighted in negative reporting, but minority currencies are. For example, the article is on the Netherlands, in this particular case about $20m is estimated to have been involved, part of it laundered through bitcoin, part of it through various fiat currencies and luxury goods. Is $20m significant? Well let's go back 6 years to 2010, when a bitcoin costed $0.04 (today around $400) and was virtually non-existent. At the time the Netherlands invested about $100m into improving the ability to track and prosecute money-launderers. (already you can see, if a government invests $75m to fix a problem, you can be rest-assured that $20m is a tiny part of the problem). At the time the police also estimated that in the Netherlands alone about $20 billion was laundered. As such, this bitcoin laundering case, the first of this magnitude I'm aware of in the Netherlands in years, consists of just 0.1% of the annual money laundering.
ryanlol 11y ago
>It seems to me BitCoin can actually aid law enforcement in tracking down money laundering! Not really. Bitcoins biggest weakness for money laundering is a very low market cap, the blockchain doesn't really help much against basic money laundering techniques.

braythwayt 11y ago

Hairdressers, barbers, restaurants, corner stores, garages, and nail salons. High-volume, cash businesses.

extra88 11y ago
Ahem, car washes. http://breakingbad.wikia.com/wiki/A1A_Car_Wash http://breakingbad.wikia.com/wiki/A1A_Car_Wash

patio11 11y ago

Then you can have as many "customers" as you like and nobody can really tell how many you really might have had Note that, for this and related reasons, the IRS guides on examining car washes and laundromats (yes, these documents both exist and are publicly available) says to find their water bill from the business' books, look up the price of water in the area, Fermi estimate the amount of legitimate business happening, and compare with reported revenue. If a wash costs $1 and you use 250k washes worth of water but report $60k in gross receipts you're evading taxes; if you report $6 million in gross receipts you're laundering more than underwear. (A technique with similar impact is "compare with a selection of similarly situated businesses in your files.")

lifeisstillgood 11y ago
The U.K. Version of this was to count the number of tinfoil boxes purchased and delivered to the Chinese / Indian / Mexican takeaway and divide by the number of reported meals. While amusing it is one of those depressing things to realise that in a decade or two lying will become almost impossible to get away with. I suspect this will have an impact on human society
- gherkin0 11y ago
  Couldn't that be gamed pretty easily by buying the takeout boxes and then selling them again under the table to a legitimate business?
  - mattmanser 11y ago
    Buying them and junking them would be far safer. Otherwise whoever you're selling them to will be investigated for money laundering and that could lead back to you.
  - JupiterMoon 11y ago
    Or just buying them and throwing them away.
  - lifeisstillgood 11y ago

hackerboos 11y ago

Zerocoin/Zerocash now Zcash will likely make laundering money in far easier than Bitcoin makes it: http://www.wired.com/2016/01/zcash-an-untraceable-bitcoin-alternative-launches-in-alpha/ http://www.wired.com/2016/01/zcash-an-untraceable-bitcoin-al...

cyphar 11y ago
The point of Zcash is to make the sender anonymous. The receiver is not, for taxation (and traceability) reasons. So, money laundering will not be easy because you'd have to explain why you suddenly got a large amount of money that doesn't match with any business you run.