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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 B

by 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.
dawnbreez 11y ago
BTC accounts don't have to be tied to an identity; the assumption is that you can buy BTC with stolen cash and nobody can tell it was you who bought it. When you cash out, that goes away, because you're confirming that you have the money by sending it to a bank account with your name on it.

by mdw 11y ago

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.

dawnbreez 11y ago

BTC accounts don't have to be tied to an identity; the assumption is that you can buy BTC with stolen cash and nobody can tell it was you who bought it. When you cash out, that goes away, because you're confirming that you have the money by sending it to a bank account with your name on it.