Is Crypto Money Laundering Possible?
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Is Crypto Money Laundering Possible?

Money Laundering Possible?

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Money Laundering Possible?​

Bitcoin and other cryptocurrencies are developed on blockchain technology. In simple terms, what this means is that the transactions carried out using Bitcoin clearly identify each previous transaction since this is digital currency.

Is Crypto Money Laundering Possible?

Bitcoin and other cryptocurrencies are developed on blockchain technology. In simple terms, what this means is that the transactions carried out using Bitcoin clearly identify each previous transaction since this is digital currency. As a result, you are able to trace back the source of each Bitcoin and therefore the money trail is always readily accessible. Apart from the many other benefits of Bitcoin, this meant that you could not launder your money if you are transacting in Bitcoin or other blockchain-based cryptocurrencies.

However, what has come to everyone has a huge surprise, it turns out that there are ways to carry out the notorious act of money laundering within cryptocurrency as well. According to the Department of Justice of the United States of America, a Russian-Swedish national has been arrested and is in their custody who was allegedly responsible for and the mastermind behind a crypto yuan pay group scam laundering website, which has been operational for quite some time now.

Based on the news release by the Department of Justice, this crypto launderer used a crypto mixer that will hide the source of the cryptocurrency and this task is achieved by mixing the crypto with other funds. This alleged crypto money launderer has been responsible for moving over 1.2 million Bitcoin, the value of which is approximately 335 million US dollars (value based on the time when these transactions actually took place).

The Department of Justice has further reported that the major chunk of crypto laundered through this alleged criminal was sourced from darknet marketplaces. These transactions have been linked to several illicit activities such as identity theft, buying and selling of illegal narcotics, abuse activities and computer-related frauds for which ransom is demanded. This has also been confirmed by the IRS (Internal Revenue Service) who have given a statement that the majority of Bitcoin sent through this laundering service was tied to illegal narcotics as well as several other illicit goods.

What does this mean for the average trader?

If you are just an ordinary crypto trader who has invested a small portion of your income in the crypto market and are following your data analytics from a trusted crypto trading signals provider and making small trades every now and then to make profits, this news should seem irrelevant for you. After all, you are not doing anything illegal and are simply trying to make an honest living from legitimate crypto trades and at most are seeking aid from a good crypto trading signal to give you an edge over other amateur trades, right? That is correct but incidents like these do have a more far reaching impact at times that you would imagine.

Governments all across the globe are already not in favor of the use of crypto. Some have banned crypto and others have started regulating them strictly. The reasons behind these policy regulations are because governments feel threatened by these digital currencies as their monopoly over the local currency can be compromised.

But on the other hand, there are way too many benefits that cryptocurrency is offering. And the pace at which it is growing has made it highly likely that crypto is indeed the future of financial transactions. Because of all these benefits crypto has to offer, most diplomatic regimes have a hard time justifying an outright ban or strict regulations on crypto especially since a lot of their citizens have now invested in crypto and they will not be able to handle the backlash from them.

This is why governments are always looking for reasons to justify their strict regulations on cryptocurrencies and an incident like this is the best thing they could find. Since the biggest claim of cryptocurrency is that each transaction can be distinctly identified and traced back to its source, a revelation that these is not always the case and the money can be laundered by using crypto is an easy shield for governments to fall back to for justifying their imposition of strict regulations on the use of crypto.

While we hope that these incidents remain limited and governments do not end up using them as an excuse for banning crypto, it is important for crypto companies to strengthen their securities protocols and come with the necessary software measures that will minimize the chance for anyone to tamper with the system and aid in the carrying out of illicit activities by criminals by using crypto. The deficiencies of conventional currencies must be highlighted again so that the superiority of crypto is reinstated.

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This article has not been reviewed by Odyssey HQ and solely reflects the ideas and opinions of the creator.
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