Money Laundering with Bitcoin Dwarfed by Cash
Cybercriminals looking to launder money would much rather use cash than Bitcoin according to a new report published on behalf of SWIFT.
Money laundering is a cause of great concern for all governments, and the narrative has always been that Bitcoin is preferred by criminals.
However, research undertaken by British defence and aerospace company BAE Systems negates the narrative that has been formed to try and discredit the leading cryptocurrency.
Money launderers prefer cash to Bitcoin
Money laundering causes a huge dent in the global economy, which as well as being illegal creates other illegal and dangerous markets, and the money in these markets totals in the trillions.
‘The activities of all cyber-criminals, whether working individually, as part of a small gang, as organised crime groups, or even for a nation state, have resulted in annual total cyber-crime revenue estimated at USD 1.5 trillion.’
For as long as Bitcoin has been in the public-sphere it’s been labelled criminals’ money, drugs money, money for the darkweb, whatever, but the truth is it’s one of the worst ways to launder money.
Look at FBI Special Agent Shaun Bridges who was working on the Silk Road case that confiscated thousands of Bitcoins. He is now spending a few years in a state penitentiary after trying to steal 1600 of the seized Bitcoin.
And the amount of Bitcoin used for money laundering pales in comparison to that used by cash, which is far easier to use for gangs according to the SWIFT report.
‘Identified cases of laundering through cryptocurrencies remain relatively small compared to the volumes of cash laundered through traditional methods,’ claims the report.
However, the report does conclude that the rise of privacy-focused cryptocurrencies such as Monero (XMR) and Komodo (KMD) are a threat to policing money laundering.
‘The raft of alternative cryptocurrencies that offer greater anonymity […] that help obscure the source of funds by blending potentially identifiable cryptocurrency funds with large amounts of other funds, could boost the appeal of cryptocurrency for nefarious purposes.’
And while this is a concern for some, it’s also a hindrance to the growth of privacy coins.
We have seen regulatory pressure from many jurisdictions and Japan and South Korea have gone as far as imposing a blanket ban on privacy-focused cryptocurrencies.
Criminals will always launder money, but Bitcoin isn’t their best bet
While pseudonymous transactions is appealing for some at the time. Every Bitcoin transaction is traceable, and they can all be tracked, just ask former Special Agent Shaun Bridges.
And while the narrative has always been to discredit Bitcoin, that is now changing. Institutions and institutional investors understand the necessity of hard money, and they’re now beginning to understand Bitcoin.
MicroStartegy were the first institution to invest in Bitcoin publicly, and it will start an avalanche.
And the irony is, the more people that use Bitcoin the more money will get laundered through it. But as Special Bridges found to his displeasure, Bitcoin is clean, hard and honest money.
Author: Tommy Limpitlaw
A Bitcoiner since 2017 and a Bitcoin Maximalist since 2018, Tommy is our main writer and editor at Bitcoin Maximalist. Other than researching and writing about Bitcoin, Tommy loves spending time with his family and supporting his beloved Leeds United.