Is Crypto Money Laundering Possible?
Start writing a post

Is Crypto Money Laundering Possible?

Money Laundering Possible?

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.

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

Bruce Springsteen's Top 7 Lyrics

Everything Bruce says in his classic rock songs.

bruce springsteen album cover born in the usa

Anyone who was born and raised in New Jersey (or anywhere really) knows of Bruce Springsteen, whether or not they like him is a whole other situation. I hope that his hundreds of classic rock songs and famous high energy performances, even in his sixties he can put on better concerts than people half his age, are at least recognizable to people of all ages. Love him or hate him (I identify with the former) you have to admit that some of his songs and interviews have inspirational quotes and lyrics.

Keep Reading...Show less

New England Summers Are The BEST Summers

Why you should spend your next summer in New England.

Marconi Beach

Three years ago, I chose to attend college in Philadelphia, approximately 360 miles away from my small town in New Hampshire. I have learned many valuable lessons away from home, and have thoroughly enjoyed my time spent in Pennsylvania. One thing that my experience has taught me, however, is that it is absolutely impossible to beat a New England summer.

Keep Reading...Show less

Fibonacci Sequence Examples: 7 Beautiful Instances In Nature

Nature is beautiful (and so is math). The last one will blow your mind.

illustration of the fibonacci sequence

Yes, the math major is doing a math-related post. What are the odds? I'll have to calculate it later. Many people have probably learned about the Fibonacci sequence in their high school math classes. However, I thought I would just refresh everyone's memories and show how math can be beautiful and apply to physical things everywhere around us with stunning examples.

Keep Reading...Show less
the beatles
Wikipedia Commons

For as long as I can remember, I have been listening to The Beatles. Every year, my mom would appropriately blast “Birthday” on anyone’s birthday. I knew all of the words to “Back In The U.S.S.R” by the time I was 5 (Even though I had no idea what or where the U.S.S.R was). I grew up with John, Paul, George, and Ringo instead Justin, JC, Joey, Chris and Lance (I had to google N*SYNC to remember their names). The highlight of my short life was Paul McCartney in concert twice. I’m not someone to “fangirl” but those days I fangirled hard. The music of The Beatles has gotten me through everything. Their songs have brought me more joy, peace, and comfort. I can listen to them in any situation and find what I need. Here are the best lyrics from The Beatles for every and any occasion.

Keep Reading...Show less
Being Invisible The Best Super Power

The best superpower ever? Being invisible of course. Imagine just being able to go from seen to unseen on a dime. Who wouldn't want to have the opportunity to be invisible? Superman and Batman have nothing on being invisible with their superhero abilities. Here are some things that you could do while being invisible, because being invisible can benefit your social life too.

Keep Reading...Show less

Subscribe to Our Newsletter

Facebook Comments