Technology Bitcoin money laundering is a classically stupid crime

11:32  05 december  2019
11:32  05 december  2019 Source:   qz.com

UNICEF now takes bitcoin and ether donations

  UNICEF now takes bitcoin and ether donations UNICEF, the United Nations' charity that helps underserved children around the world, now accepts donations in bitcoin and ether. As the first UN organization to embrace cryptocurrencies, UNICEF and the recipients of its funding will benefit from the lack of fees that that result from money being transferred overseas. Plus, donors will presumably be able to see how their contributions are disbursed to various initiatives. When UNICEF receives aWhen UNICEF receives a cryptocurrency donation, it won't cash it out for a national currency. Rather, it will hold onto the bitcoin or ether and send the funds to a charitable cause in that same tender.

Inevitably, money launderers turn to shady peer-to-peer markets and other nefarious deeds to turn their Bitcoin into cash. As such, cleaning digital funds exposed to blockchain casinos before depositing to Coinbase and the like is an often-cited use-case, beyond the ultra illegal money laundering .

Money laundering is the illegal process of concealing the origins of money obtained illegally by passing it through a complex sequence of banking transfers or commercial transactions.

a group of people standing in front of a mirror posing for the camera© Provided by Quartz

Laundering money through bitcoin is a bad idea—not only because it’s illegal, but also because it leaves a permanent trail. Defendants have repeatedlybeen undone because they’ve relied on the cryptocurrency for some part of their nefarious activities. Sometimes, they’ve been arrested years after their alleged crimes.

According to the United Nations Office on Drugs and Crime, it’s estimated that 2% to 5% of the global GDP—or $800 billion to $2 trillion—is laundered each year, much of it in cash. But over the last few years, with cryptocurrencies growing in prominence and price, they’ve become a popular option, too. Government agencies have started contracting crypto-analytics firms like Chainalysis and CipherTrace to track down money launderers and other criminals.

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To lower bitcoin money laundering risk, many criminals turn to decentralized peer-to-peer networks which are frequently international. Here, they can often use unsuspecting third parties to send funds on their way to the next destination. Most cryptocurrency money laundering schemes end with the clean

Money laundering is essential for criminal organizations that wish to use illegally obtained money effectively. Dealing in large amounts of illegal cash is inefficient and dangerous. A white-collar crime is a non-violent crime committed by an individual, typically for financial gain.

“Cryptocurrencies have the reputation for being cross-border and anonymous, and therefore attractive to bad actors across the world,” Kim Grauer, senior economist for Chainalysis, explained to Quartz over email. “But because transactions involving cryptocurrencies like bitcoin are recorded on a permanent, public, and immutable ledger, cryptocurrencies can actually offer unprecedented transparency into financial transactions.”

Laundering money through bitcoin is like pulling off a jewelry heist, but leaving a map to your apartment at the scene of the crime. You can shred the map into tiny pieces—by sending bitcoin through multiple wallet addresses, or accounts, to hide your tracks—but with sufficient time and data-crunching power, it’s possible for other people to reassemble the clues.

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Do Criminals Have it Easier Since The Advent of Bitoin? Today's Letter is B. The Feds never did get Al Capone for all the murders they suspected him of which included the 1929 Saint Valentine's Day Massacre nor the umpteen counts of bribery or extortion.

Money laundering , the process by which criminals attempt to conceal the illicit origin and ownership of the proceeds of their unlawful activities. Money laundering is a serious threat. It has devastating consequences for the financial system and for national security, since it provides funds for terrorists

What cryptocurrencies save in time (versus say, buying and selling bars of gold) they lose in efficacy. When it comes to financial crime, the vast majority of cryptocurrencies, including bitcoin and ether, are blunt instruments.

“The goal of money laundering is to create a chain of transactions that can’t be traced, so since the bitcoin blockchain is designed to have an indelible public record of all transactions, it makes ‘laundering’ much more difficult,” Dave Weisberger, CEO of CoinRoutes, a crypto order-routing service, said. “The technology from [blockchain analytics] firms such as Elliptic and Chainanalysis is sophisticated as well. They can trace [wallet] addresses quite well, which also make law enforcement easier.”

That’s part of why the arrest of a crypto expert last week is confounding. Virgil Griffith, a special projects researcher for the Ethereum Foundation, was detained last week in Los Angeles. The US accuses him of traveling to North Korea earlier this year “in order [to] deliver a presentation and technical advice on using cryptocurrency and blockchain technology to evade sanctions.”

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As money laundering is a consequence of almost all profit generating crime , it can occur practically anywhere in the world. Generally, money launderers tend to seek out countries or sectors in which there is a low risk of detection due to weak or ineffective anti- money laundering programmes.

A common topic on spy shows and mobster movies, money laundering may be an unclear concept for many. What is it? Is it illegal? If so, why? What are the elements of this crime ?

Regardless of whether Griffith is innocent or guilty, what he’s accused of is, well, dumb. Is it possible to launder money and evade US sanctions using cryptocurrencies? Yes. Is it advisable, or even practical? Hell no. Crypto’s limited trading volumes, traceability, and storage risk affect everybody.

Reuters additionally reported that Griffith may have planned to send mining equipment to North Korea, ostensibly so the government or others could generate their own ether. Apparently he called the idea “cool.” But again—regardless of whether a crime was committed—it’s laughably unrealistic at scale, and anybody who got within 100 miles of North Korean bitcoin would put themselves on the blockchain (and watchlists) forever.

Bits & Pieces
  • The SEC has a new chief crypto cop (CoinDesk)
  • DOJ arrests Ethereum Foundation coder for teaching North Korea how to launder money, evade sanctions (Amy Castor)
  • Virgil Griffith: Internet Man of Mystery (NYT, 2008)
  • Ethereum is game-changing technology, literally (Virgil Griffith on Medium)
  • Ex-CFTC chair Giancarlo to push for digital dollar in new role at white-shoe law firm (CoinDesk)
  • Crypto needs more journalists than it wants to admit (Fortune)

Tomorrow at Princeton University: The future of money and the payment system, BIS General Manager Agustín Carstens (Watch here)

Please send news, tips, and gold bars to privatekey@qz.com. Today’s Private Key was written by Matthew De Silva and edited by Mike Murphy. You must study the endgame before everything else.

Largest Crypto Options Exchange Heads for Panama Amid Scrutiny .
Deribit, the world’s dominant exchange for trading cryptocurrency options, is relocating to Panama from the Netherlands next month in anticipation of rising regulatory scrutiny. The Netherlands is likely to adopt new European Union regulations that “would mean that we have to demand an extensive amount of information from our current and future customers,” the Amsterdam-based company said in a letter to customers obtained by Bloomberg News. Deribit accounts for about 80% of Bitcoin options volume, according to data tracker Skew.

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