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British Man Charged With Using Bitcoin to Launder 11.5 Million Euros


A British man has been arrested on money laundering charges in Holland. He is alleged to have been running a “money cleaning” service for clients trading on the dark web between the years 2014 and 2016. The Dutch Public Prosecutor demanded on Wednesday that he serves at least five years in prison.

Funds Likely Came From Illicit Sources

According to NL Times, the laundered money is thought to have come from various dark web dealings in illicit goods. The man accused is a 38-year-old British man living in Amsterdam. It’s alleged that he was responsible for “cleaning” over 11.5 million euros during the years he was active. It’s thought that he received Bitcoin from dealers of narcotics and other contraband items and sold them using his own bank account. He then withdrew the funds in local currency and returned them, minus a cut for himself, to the original party.

The Public Prosecutor alleges that the man took an “unusually high” percentage of the funds. It’s thought that he charged between five and eight percent for carrying some of the burdens of risk for his clients. The accused and his spouse were living predominantly off their ill-gotten gains. The Prosecutor added that neither of them earns much in the way of legal income.

Along with the charges of money laundering, the suspect is also thought to have been previously cultivating cannabis illegally. Photos on his computer of large cannabis plantations at his previous home support this. The Prosecutor stated:

“He thought he had seen a gap in the market and jumped into it… He started with a cannabis plantation, sold the harvest on the dark web and was paid in bitcoins. Soon he noticed that he no longer needed the weed to make a substantial turnover and a fine profit.”

The man accused is adamant that all those he dealt with over the years 2014-16 were law-abiding citizens. He refutes the allegation that they were involved in any illicit trade. It’s thought that the court will rule on the matter in early March.

Bitcoin and other cryptocurrencies have long been associated with money laundering. However, just because something illegal is possible using a certain tool doesn’t mean the tool ought to be forever tarred with that brush. It’s possible to murder someone with a lump hammer. Are all lump hammers associated with murder? No, of course they’re not.

Critics of Bitcoin love to play the money laundering card whenever they can. The fact is there are plenty more examples of money laundering that takes place using other forms of currency. Recently, US Bankcorp were forced to pay a hefty fine for the very same crime. Also, one of Bitcoin’s fiercest naysayers, Jamie Dimon of JP Morgan Chase, has repeatedly stated that crypto is only good for criminal use. This includes money laundering. Just weeks after making his famous “fraud” remarks JP Morgan themselves were charged with money laundering. Evidently, current money laundering laws are failing and it’s a cop-out to blame an innovative form of currency for their shortcomings.

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Bitcoin Isn’t the Currency for Money Laundering, US Bank Pays $613m Fine


Money laundering has always been a big problem in the financial sector. Turning “dirty” money into “clean” money makes it nearly impossible to trace criminal activity. One could argue money laundering is a sold as the banks themselves. US Bancorp is fined $613m to settle “willful” violations of the Bank Secrecy Act. It is once again evident financial institutions are the go-to solution to launder money. Cryptocurrencies such as Bitcoin, on the other hand, are very small fish in this cesspool.

Addressing money laundering problems is not easy by any means. With so many people involved in these processes, it’s only natural some transactions go by unnoticed. Banks staffers often fail to recognize or report suspicious transactions. In the case of US Bancorp, it will cost them a hefty penny. With $613m in fines to be paid, some bank members will be to blame. It also shows how relatively easy it is to launder funds through the banking system. There are quite a few institutions who either don’t flag transactions or do not bother to deal with the reporting side of things.

US Bancorp Fined for Money Laundering

Most of the fines will be paid to the US Treasury. The remainder will go to FinCEN, The Federal Reserve, and the Office of the Comptroller of the Currency. While such a fine is steep, it’s usually a drop in the bucket. Entities such as US Bancorp can make a lot more money from processing these illicit transactions like normal. They collect fees for every transaction, after all. This fine will not necessarily make any big dent in their earnings. More worryingly, people will probably forget US Bancorp was even involved in this scandal in a few months from now.

It is uncanny how these are the same banks who tell people Bitcoin is a tool for criminals and terrorist. Unlike the systems used by US Bancorp and consorts, Bitcoin is as transparent as it can get. There is a degree of pseudonymity, but people can flag transactions in real-time. All information other than users’ identities is public and traceable. Converting Bitcoin to real money needs to be done through brokers or exchanges. These companies perform checks to prevent money laundering as well. It is very cumbersome to cash out crime proceeds with Bitcoin as of right now.

Even then, the converted money is still processed by banks. If they do not perform proper AML checks, bitcoin isn’t to blame for their shortcomings. US Bancorp and consorts need to be punished far more severely for failing to adhere to regulatory guidelines. They have all of the information on hand to flag, track, and identify suspicious behavior in a few minutes. Why they aren’t doing so is anybody’s guess right now. Money laundering will always be facilitated by the banking system.

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Europol Estimates Cryptocurrencies Account for 4% of Illicitly Trafficked Cash in Europe


Criminals in Europe are using cryptocurrencies to launder as much as $5.5 billion (£4 billion) in illegal money according to the head of Europol, the EU’s policing agency.

Director of Europol, Rob Wainwright, estimates that around 4% of all criminal proceeds in Europe are being funneled through cryptocurrencies like Bitcoin — and he expects this figure to increase. Given that the agency’s standing estimate for the total amount of illicit cash circulating Europe is around $138 billion (£100 billion), this would put the amount being trafficked in cryptocurrencies at $5.5 billion.

“It’s growing quite quickly and we’re quite concerned,” Wainwright said in an interview with the BBC. He went on to add that police find it harder to stop illicit cryptocurrency transfers because they have no way to freeze crypto wallets in the way they could freeze a traditional bank account: “They’re not banks and governed by a central authority so the police cannot monitor those transactions,” he said. “And if they do identify them as criminal they have no way to freeze the assets unlike in the regular banking system.” To make matters worse, Europol has determined that money mules are being used to cash out, converting Bitcoin into fiat currencies in smaller amounts making it harder for police to track.

Speaking to the industry in general, Wainwright said the following: “They have to take a responsible action and collaborate with us when we are investigating very large-scale crime. I think they also have to develop a better sense of responsibility around how they’re running virtual currency.”

Law enforcement officials across the board are increasingly concerned about the use of cryptocurrencies by organized criminals. The coins are not directly regulated in Europe and it is still unclear among most financial regulators how they should be classified under existing laws. The UK is considering making amendments to EU anti-money laundering rules to make it apply to cryptocurrencies.

With regard to money laundering, Bitcoin appears to be the most frequently used cryptocurrency, likely because of its higher profile. But officials have also voiced concerns about others like Monero and Zcash, which go to even greater lengths to conceal the identities of those trading in them. Overall, Litecoin and Dash are actually second to Bitcoin in terms of trading volume on the dark web.

Outside policing agencies like Europol, others governmental organizations are more enthusiastic about the future of cryptocurrencies — in particular, blockchain technology. The European Commission announced in a press release earlier this month that it is launching the EU Blockchain Observatory and Forum, taking a great step forward aimed at “uniting” the economy around Blockchain. The project will bring together various sectors, including regulators, industry experts, and politicians, to develop new use cases. 

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