- Using Bitcoin to Launder Money is a dumb move
Many experts believe that laundering money through Bitcoin is not a wise move, not only it is illegal, but also because it leaves a permanent trail behind. Many criminals using cryptocurrency have been arrested in the past and some of the criminals arrested had committed the crime many years before.
As per the data provided by the UN Office for Drugs and Crime, about 2 to 5 percent of the global GDP ($800 billion to $2 trillion) is laundered each year and mostly in cash. But, with the increase in adoption and price of the cryptocurrency, it is becoming a great alternative.
To counter it, Government agencies have started to employ various crypto-analytics firms, like CipherTrace and Chainalysis, to trace money launderers and other criminals.
The anonymity feature of cryptocurrency has attracted many criminals from around the world. But the transactions that occur through cryptocurrency get permanently recorded on the ledger.
Laundering money through Bitcoin is like robbing a bank and leaving your address at the crime scene. Even if the address is shredded into small pieces, in this case transferring Bitcoin into different wallets of different exchanges, to hide your track. But eventually, with time and resources (data-crunching power), it is possible to retract the criminal.
The objective of laundering money is to create untraceable chains of transactions. But in the case of Bitcoin, which uses blockchain technology, permanent public records for all transactions are made, making laundering even more difficult. The technology implemented by blockchain analytics firms is very sophisticated; tracing of wallet addresses can be done very easily, making it easier for law enforcement.
Earlier this year, Virgil Griffith, a project researcher at Ethereum Foundation, was detained in Los Angeles. He was being accused of having a working relationship with North Korea. The police believed that, in the early part of the year, Griffith had traveled to North Korea to deliver a presentation related to cryptocurrency and blockchain technology. He was also accused of giving technical advice to North Korea, regarding different methods, to evade sanctions using cryptocurrency.
Regardless of whether Griffith is guilty or not, the accusations that are made against him are very dumb. In the case of cryptocurrencies, it is completely impossible to evade US sanctions and launder money.
It was also reported that Griffith may have also planned to send mining equipment to North Korea, so they could generate their ether. But this seems to be far-fetched from reality as anyone dealing in North Korean Bitcoin would put himself on the blockchain and watch lists forever.
Disclaimer: The article is just to provide information and shouldn’t be considered as any financial advice. It is advisable to conduct thorough research before investing in any cryptocurrency.
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