5 ms·

Can't people just use crypto-currency for money laundering now?

csomar 9y ago
The cards were probably loaded through crypto. Annon cards with $250 limit but they are virtual and cost like $3-5 a piece.
chinathrow 9y ago
Why would you, if other, less volatile means are still available?
pmorici 9y ago
How could crypto currency launder money? Money laundering by definition means taking dirty money and running it through a legitimate business to make it appear to come from the legit source.
adrr 9y ago
Not sure how you would launder money through crypto. Let say a drug dealer has $100k worth of dirty cash. He or she could buy $500 amazon gift cards from most stores and launder it through their market place by buying the books. How would someone do it with crypto? Know your customer(KYC) laws would require legitimate bitcoin sellers to verify you identity. I assume this even true for bitcoin ATMs. Trying to launder $100k this way would a generate suspicious activity(SAR) report to the government.
- mihaifm 9y ago
  He could put a small sum of money on an exchange, let's say $10k. Then transfer it into a anonymous cryptocurrency like Monero or ZCash. "Friends" send him the rest of the money (in the form of Monero) which he then brings back to the exchange. He can justify the amount by "smart" trading. With the current volatility in the market, making 10x profits is not unheard of.
nabla9 9y ago
How is the currency changing anything? It's like using cash. Crypto-currency exchanges are not exceptions to money laundering regulations. You have to identify yourself and you may need to explain the source of money if you withdraw too much.
- jrockway 9y ago
  I'm not sure you need to involve exchanges necessarily. Just buy some CPU/GPU resources and mine your own currency. I've never had a hosting provider do KYC on me. Then you can store the cryptocurrency indefinitely and move it to real currency as needed. That step might require KYC, but you can buy physical items using cryptocurrency, so maybe not. I have no idea whether or not this is cost effective given current mining difficulties and cloud hosting rates... but I'm sure someone somewhere is doing this.
  - nabla9 9y ago
    > CPU/GPU resources and mine your own currency. There is no need to money launder money you have mined yourself.
    - spockz 9y ago
      The laundering is happening when buying the gpu/cpu and electricity. Bad money is laundered in the capacity to generate crypto coins.
      - adbachman 9y ago
        The point of money laundering is confusing the origin of money you can’t spend. If you can already spend it on miners and utilities, why go through the pain of cryptocurrency? Just buy jet skis and restaurants or whatever it is you actually want.
        MichaelGG 9y ago
        Miners take Bitcoin directly giving you a way to launder a big chunk of money. They don't ask questions and it's not a big visible thing like buying cars in your name. Hosters are fairly cheap and aren't going to be a problem.
lawn 9y ago
Just start a software company of some kind. Maybe make some games, they don't even have to be good. Then take payments in cryptocurrencies. Directly without going through BitPay or something. Pay with Monero which cannot be traced on the blockchain and deliver the games to emails. Now you have a company with seemingly legit profits. All you need to do is convert your dirty money to cryptocurrencies at the start. Is it really this simple?
- c22 9y ago
  Sure, but you can do the same thing with an arcade or coin operated car wash by just converting your dirty money to quarters too.
  - lawn 9y ago
    It's much easier and faster this way though.
    - c22 9y ago
      Is it really though? How do you convert your dirty money into cryptocurrencies without leaving a damning electronic paper trail? Buying them from strangers in the food court at the mall? Surely this channel is not sustainable at scale.

The cards were probably loaded through crypto. Annon cards with $250 limit but they are virtual and cost like $3-5 a piece.

chinathrow 9y ago

Why would you, if other, less volatile means are still available?

pmorici 9y ago

How could crypto currency launder money? Money laundering by definition means taking dirty money and running it through a legitimate business to make it appear to come from the legit source.

adrr 9y ago

Not sure how you would launder money through crypto. Let say a drug dealer has $100k worth of dirty cash. He or she could buy $500 amazon gift cards from most stores and launder it through their market place by buying the books. How would someone do it with crypto? Know your customer(KYC) laws would require legitimate bitcoin sellers to verify you identity. I assume this even true for bitcoin ATMs. Trying to launder $100k this way would a generate suspicious activity(SAR) report to the government.

mihaifm 9y ago
He could put a small sum of money on an exchange, let's say $10k. Then transfer it into a anonymous cryptocurrency like Monero or ZCash. "Friends" send him the rest of the money (in the form of Monero) which he then brings back to the exchange. He can justify the amount by "smart" trading. With the current volatility in the market, making 10x profits is not unheard of.

nabla9 9y ago

How is the currency changing anything? It's like using cash. Crypto-currency exchanges are not exceptions to money laundering regulations. You have to identify yourself and you may need to explain the source of money if you withdraw too much.

jrockway 9y ago
I'm not sure you need to involve exchanges necessarily. Just buy some CPU/GPU resources and mine your own currency. I've never had a hosting provider do KYC on me. Then you can store the cryptocurrency indefinitely and move it to real currency as needed. That step might require KYC, but you can buy physical items using cryptocurrency, so maybe not. I have no idea whether or not this is cost effective given current mining difficulties and cloud hosting rates... but I'm sure someone somewhere is doing this.
- nabla9 9y ago
  > CPU/GPU resources and mine your own currency. There is no need to money launder money you have mined yourself.
  - spockz 9y ago
    The laundering is happening when buying the gpu/cpu and electricity. Bad money is laundered in the capacity to generate crypto coins.
    - adbachman 9y ago
      The point of money laundering is confusing the origin of money you can’t spend. If you can already spend it on miners and utilities, why go through the pain of cryptocurrency? Just buy jet skis and restaurants or whatever it is you actually want.
      - MichaelGG 9y ago
        Miners take Bitcoin directly giving you a way to launder a big chunk of money. They don't ask questions and it's not a big visible thing like buying cars in your name. Hosters are fairly cheap and aren't going to be a problem.

lawn 9y ago

Just start a software company of some kind. Maybe make some games, they don't even have to be good. Then take payments in cryptocurrencies. Directly without going through BitPay or something. Pay with Monero which cannot be traced on the blockchain and deliver the games to emails. Now you have a company with seemingly legit profits. All you need to do is convert your dirty money to cryptocurrencies at the start. Is it really this simple?

c22 9y ago
Sure, but you can do the same thing with an arcade or coin operated car wash by just converting your dirty money to quarters too.
- lawn 9y ago
  It's much easier and faster this way though.
  - c22 9y ago
    Is it really though? How do you convert your dirty money into cryptocurrencies without leaving a damning electronic paper trail? Buying them from strangers in the food court at the mall? Surely this channel is not sustainable at scale.