Topic: Drug Money and the Rise and Rise of Bitcoin (Read 1128 times)

Ok, so said it was the upcoming hard fork that was making Bitcoin rise to new ATH.  Now that it has been cancelled, it's still going up.  What are they gonna say now?  It's the upcoming Bitcoin future's market?  Lol.  I mean really...  I'd like to see my drug money theory disproved but I haven't seen one compelling argument made.



That was Pablo Escobar's cash in the 1990's.  He didn't know where to put them.  That's not even all of them, just a 'small' portion, and that's just from one cartel.

They probably buy bitcoins from time to time, but they are obviously not the main reason behind Bitcoin price rise. I would rather say it is the Bitcoin future from Chicago Mercantile Exchange.

I do not think so, btc increased just because the investors are speculation, no matter what drug cartels are manipulating

Well, you get bitcoin for drug trafficking what's next? You will need to transfer this amount in Fiat. How you do it. If you get into the sphere of interest of law enforcement agencies that they are sure you will find. Every person leaves traces in the Internet. Fiat's much easier to hide. Bitcoin is used for such purposes only Amateurs.

It is something sure at 100% that there is illegal money flowing into Bitcoin, it is just a miraculous tool made for them. However, I doubt it is the reason behind the current rise, because it is probably somehow isolated and probably not a big-scale trafic. But I might be wrong. The principle of those groups is that we can not know what they are doing.

Or set up a Bitcoin exchange operated by 'anonymous' people, just like what Alex Vinnick did.  And I wouldn't be surprised if some of the other 'legit' exchanges are being used to launder drug money.  If bank executives at the top do it, then Bitcoin exchanges are the cheaper option.  It would be naive to think no shenanigans are going on in the space.

Criminal Mastermind' of $4bn Bitcoin Laundering Scheme Arrested
https://www.theguardian.com/technology/2017/jul/27/russian-criminal-mastermind-4bn-bitcoin-laundering-scheme-arrested-mt-gox-exchange-alexander-vinnik

This is a very good explanation.

Indeed, trade in illicit goods was a driver of bitcoin price a while ago (at the times of Silk Road, where you had to have btc to trade), now it is negligible.

Yes Drug money are into bitcoin too here in my country they use bitcoin as a payment gateway and also those big fishes they are using bitcoin to pay drugs online and it will be delivered at the clubs i don't know why people are always find there way to sell drugs even in online i see lots sellers now who accept bitcoin lmao.

The movie is cool but it is pretty far from the current situation. Nowadays every major BTC operation would be notified by the government, you still can't buy anything for bitcoins (ofc you can but if you have a huge amount in BTC then you won't find a good usage for it) and you cant exchange big amounts of BTC. You gona have the same situation as a guy in a movie but you won't have to hide your money.
Also I don't think that cartells are causing this pump simply because they are not that stupid and they should have their own financial specialists. Right now bitcoin in in the bubble and it won't be a smart move to buy big amounts of BTC on the top of the bubble.

Who knows.
I don't think drug cartels need bitcoin they always find a way how to launder paper money, and not to mention some cartels don't even have to launder money because their country is corrupted from bottom to top.
Besides, exchanges could simply take their funds if they find anything suspicious, unless they are running exchange themselves and in that case it would be simple for them to launder money trough bitcoins, but still it doesn't explain bitcoin spike.

Maybe it is because i watch a lot of series, but yes, it is happening, a lot of drug dealers are paying and receiving money by bitcoin because it is very easy to launder that money, and for getting paid with it of course.
And those who want more anonymity, are using Monero, because it is 100% untraceable.
But if a giant cartel puts their funds in here, they will only increase the marketcap by a few millions, and it wont make any difference on the price after all.

Super interesting post just to imagine how much potential have bitcoin and others cryptoes!
Any value coin can easily rise 1000x in time.

One cannot make such a big transaction for buying large volume of bitcoin. Even after certain number of bitcoin purchases we are supposed to cope with the KYC norms. Even now people keep hold of black money, but they fear of transacting it through bitcoin or convert and keep hold in the form of bitcoin. This is all because of the system where he gets caught in one way or the other.

We can't know for sure how, but the FBI and Interpol have revealed that it was precisely because darkmarket traders used Bitcoin that they were more able to track down people. Even as early as 2013/4, journalists themselves were already able to track down and identify known addresses of traders with the most basic tracking tools. The basic idea is, if you follow every transaction, you can trace all the inputs and outputs in a chain until you eventually arrive at a known address or one that is associated with the activity.

Yes, there are so many variables, and traders tend to use mixers/tumblers heavily to mask and obfuscate their coins, but eventually, everything is somehow linked. All it takes is a trader to get careless once. Perhaps send his address by email revealing his email server IP. Perhaps by cashing out even once at an exchanger with a verified phone number that can then be tracked with GPS. The software enforcement is using now is clearly powerful enough to track them down even with heavy mixing use.

I'm not sure with your point mate how can they track you out if you are using bitcoin? unless you keep exchanging it to your local fiat and your local exchange
would be able to review your transactions, but if the drug dealer transact only with direct btc and no government can track them out aside from the hackers
who's keeps on looking for the possible victims.

The transparency of transactions kind of hurt them. If you were dealing drugs in a small scale then I'm sure law enforcement agencies are not going to spend too much resources on you, but once you start dealing with that amount of money, you're going to be on their radar relentlessly.

But hear this, not all that 39 billion will be going in Bitcoin, just enough to keep making it rise to new ATH.  If banking executives at the top help launder the cartels' money, it wouldn't be too farfeched to have an exchange (BTCe) used by money launderers (that Alex guy) to get drug money in and out of BTC.

There's even a rumor back in the day that Litecoin was being used to launder Yuan. 

It was in earlier days of bitcoin that silk road and dark markets adopted bitcoin for their illegal activities.But now,they have other ultimate choices like monero and zcash for such purposes since they provide full anonymity and bitcoin is pseudo anonymous.

Drug dealers won't be willing to risk by dealing their business with bitcoin payments as it could be easily traced.Now,bitcoin is widely used for various purposes like trading,sending huge amounts of money,buying goods,etc.Bitcoin has diversified uses.

I love google: https://www.google.com/search?q=how+much+money+does+drug+cartel+make
it tells me they are making $39 billion in a year and that is for 2008 (2009 reporting last year). the volume that goes in and out of bitcoin is not even close to that number.
if 30-40 billion dollar were to be injected in bitcoin, price would have been at $1,000,000 already. not to mention that all the drug lords would have been behind bars since all their money could have been traced easily.

Nothing. And this is actually the reason why the government questions the Bitcoin because it is a mean of money laundering and illegal transactions. But Bitcoin did not made the illegal business big, because without Bitcoin, these drug lords will still do this and continue the business.

They can be using it right now and no one here knows... Nothing is stopping them to use Bitcoins, it surely can help thieves to make their deals around the world, but if they are on the target of authorities they can be tracked and found. The question is: What is stopping authorities to arrest the big cartels and destroy the drug's market?

Yeah mate, if would be cool if those bastards would just have a USB on their pocket worth billions of dollars. hahahaha. However, they don't trust anyone specially bitcoins. They would rather have stash them somewhere like in their own backyard wherein they known that no one can touch them except themselves. And they are paranoid. They will probably check every minute if they still have their money on their wallet. So I have doubts that they will just buy bitcoin to hide all their money. And I think the circle of advisers would go against it because bitcoin can be traced in blockchain and the authorities can easily tracked it.

The entire market cap of Bitcoin is less than $120B.

That's including Satoshi, the Winks, Ver and all the other whales, the banks, the exchanges, and all the smaller holders.

Even if the cartels held 10% of all the existing bitcoins, that would be only $12B, small potatoes in the world of drug cartels.

I'm sure some have acquired Bitcoin or use it to move their money around but I don't think it represents a big part of either their business or of Bitcoin itself.

There's also the security aspect. The druglords aren't stupid. They know the blockchain is a permanent record of all transactions.

Bitcoin is merely pseudonymous, not anonymous. One little slip-up and there's a ton of forensic evidence against them.

Guys, I would not even have thought about what Bitcoin could be related to drugs or trading a weapon. You should understand that such events can only harm us and the whole of the Crypto-currency. Another would not be enough to see the crypto currency in financing terrorism. Then I think that the whole world can oppose the crypto currency in general. This is even frightening to think about.

This. It's easier to launder money through a legit business, or use cash, than bitcoin. Bitcoin is too small, and the public ledger means that if your address is tied to a persona, you are toast.

why would they even want this?
as a criminal or a drug cartel you would want to do your best to keep your money as private as possible. so you go through methods that leave a trace behind and even if they do, you clean that trace.

everyone knows well enough that bitcoin leaves the most amount of trace behind since every single transaction ever made is public.

in my opinion if any drug cartel ever wants to put their money in cryptocurrencies, they will choose something like Monero so that they can be sure it is not traceable

Hey tokeweed, I'm hearing you out! Here's my take on it, after seeing several discussions and thinking about it myself.

1. To launder that much money, you'd have to be moving a LOT of bitcoins. Regularly. If the total market cap of crypto is only 165 billion, and of that only 94 billion, we're talking about very noticeable amounts being laundered. Even taking into account a $5000 Bitcoin value, to move 1 million dollars requires 200 Bitcoins. And we know the industry is moving hundreds of millions a month. Those Bitcoin volumes moving into USB wallets are going to be very easy to detect. Getting someone to SELL you those Bitcoins is going to be hard to find. Exchanges as we know them are going to be very difficult as well.

See, if you're moving millions of fiat in a global market of 100s of trillions, it's a speck. Perhaps when Bitcoin is valued at 100,000, it may become more viable.

2. It didn't take long for the FBI to track down dark markets who went through the trouble of mixing, remixing and anonymising their transactions... on a volume far smaller than drug cartels. What this tells us is that the tracking software has become very sophisticated.

I believe the technical knowledge required to hide and launder Bitcoin, being a non-anonymous public ledger and all that, is a deterrent to major organised crime to using crypto. They've got great accountants schooled in conventional finance, but not yet the skilled programmers who would help them use crypto to their needs.

However, due to ETH's architectural difference (and Monero's), illegal activities are moving towards them and it may well be that they could be used chiefly for these. Research already shows Bitcoin illegal use dropping sharply, and is predicted to be less than 5% of volume end of this year.

3. Most likely, they haven't heard about Bitcoin yet or don't know yet how to use it. Somewhat related to (2)... but you know, these guys are probably unimaginably removed from our world of computers and digital tech. Call it a deeply-ingrained culture of paranoia!

That's why it's called money laundering.  They get someone else to buy the Bitcoins for them, to hold or to convert some back to fiat.

Haven't you guys learned anything about BTC-e and Alexander Vinnick?

And that's just part of the whole story.

Yup. The FBI testified to Congress that the public ledger made their job easier, because once they had tied an address to a person, they knew everything.

Most criminals prefer to use cash because it is genuinely anonymous, especially used bills that have been issued decades ago.

Bitcoin was earlier adopted by dark markets and used for illegal purposes earlier.But since it was pseudo anonymous,they had some issues since all transactions are publicly registered in the ledger.So,government authorities could easily trace any transaction and reach the culprit.

Later,when they found monero providing full anonymity,they just adopted monero and started using it fully.Now,bitcoin is widely used all over the world by even normal people for various purposes like trading,transactions,paying bills,buying products online,etc.

So now,bitcoin rise has no relationship with drug usage.Bitcoin has already traveled beyond such borders.

They only use bitcoin on drug related transactions as far as I know if the one they are transacting with is far away from them. When they can go meet personally to get the deal done, most of the time drug sellers and buyers meet up since it would be safer for them that way and also it is more guaranteed for them to receive their drug money and bought drugs rather than using online deepweb shops just to buy some. I also don't think that drug money and the rise of bitcoin is not related at all.

Drug cartels and the rise in bitcoin prices because they use BTC is very unlikely,I also think that they prefer cash especially if it is an old school criminals.It is possible that some new generations of drug criminals will try to take advantage of BTC and some other coins maybe just to hide some of money and profit in future like most users.There is no doubt that BTC is also used in criminal activities,but nothing more or less than fiat.

There's no reason why a drug cartel would put billions of dollars in btc, it's value is so volatile that a drug cartel can't have the luxury to see their wealth has go down 1% because of some stupid hard fork. Also, they would need an exchange to buy/sell thousands of bitcoins, and that's just asking the DEA to come to your house. Besides, those guys have enough money and power to buy anyone in the society, from a banker to a politician, so they'd rather keep laundering money like they've been doing for years.

But why only bitcoin. Actually bitcoin now is not best way to keep drugs money.
There are privacy tokens like Monero or Dash or some others. So not only bitcoin.
Actually just popularization of bitcoin give it price.

I don't think you guys get it.  Drug cartels have become one of the most powerful, most politically connected 'business corporations' in the world.  And the fact that they deal only in cash and have lots of it makes it really hard for them to store it all in banks without raising red flags.

They literally have trucks and trucks of cash.  Where do you think some of it goes?  It's very very plausible that it goes to Bitcoin for storage and for laundering.

Illegal activities can be done by bitcoin or any type of fiat currency as well. So if you worry that someone saying bitcoin is being used in these things you can simply ignore them. Anonymous is the one of the best feature in bitcoin most of the people passing critics about the coins supply compare with drugs. We can trace address and transaction but not the correct person who is using it.

Well said. If a criminal would want to be in cryptocurrency to hide his money or simply want to gain more money it will not be that 'plausible. It will be a risk and might expose them easily. Knowledge and a basic grasp of what is it can be a big deal to them. I also agree with OP's statement "But unfortunately it's a matter of time when BTC usage for criminal activity goes up (in fact it probably is going up permanently since the beginning)."

Why do people like Pablo Escobar to cut the dollars in the bags? He has a lot of bills not connected with him but legally belonging to him. This is not a problem. We saw how many politicians were hiding their money offshore. So it's only one offshore. If you ever open information in other offshore and many other famous persons. Note this is legal money. Why did he have bitcoin?

They've been laundering billions forever decades before BTC ever came along. They'll have the right people in their pocket. There's no reason for them to bother with BTC. It opens up new avenues for tracing, failure and seizure (not the BTC bit obviously).

They have enough money to buy anyone in the conventional system.

If any illegal money played big role in Bitcoin, governments would just ban it quickly. I know a lot of people like to repeat "you can't ban Bitcoin", but you can ban exchanges and prohibit any operations with it, which would hurt it's liquidity and attractiveness as an investment. But the key feature of Bitcoin also makes it ill-suited for large scale illegal activities - publicity. If authorities will be able to deduce BTC address of a criminal (for example by asking an exchange), they would then be able to trace those coins and block any attempts to exchange them for fiat or spend them at places that comply with regulations.

in my opinion, bitcoin being used for illegal and criminal activities and money laundering is possibly true because the criminals, terrorists, and illegal doers are now getting wiser and have learnt from their own/others' previous mistake. This is not new in the world of cryptocurrency, in fact, bictoin was part of the black market before in silk road in which they are using it for illegal transactions. I personally think that the syndicate world will never be eliminated in the world we live in, it is part of the cycle and balance of this world.

They can buy all the BTCs available that's for sure but it would be hard for them to buy what they need in real life using Bitcoin since they need to convert to fiat through legit exchanger which may give away their identities because exchanger would suspect the large amounts of cash out that is going to be requested. It is possible that they can go through other way of converting their BTC to Fiat but that will cost them more.

If you are a criminal you can't simply go to an exchange and buy $millions worth of bitcoin. They would need to find an OTC supplier ready to deal with criminals that has $millions in liquidity, not that easy of a task.

Also these guys are most likely computer illiterates and BTC requires knowledge to attempt to have any decent amount of privacy. They have street smarts and have no fear to shoot anybody, but I don't think they can get their heads around BTC, so they would need to hire someone else to do it which adds risk.

I think they will keep moving the good ol $ cash. But unfortunately it's a matter of time when BTC usage for criminal activity goes up (in fact it probably is going up permanently since the beginning).

Ok, I know you're probably saying 'WTF man!', but here me out because it could be plausible.

I just saw the movie called 'American Made'.  It's about this pilot named Barry Seal who smuggled drugs for Pablo Escobar, and then guns for the CIA.  The thing is he made a lot of money that...  Like 'he doesn't know where to put them' a lot...  He buries bags full of cash in his backyard ffs, just like how Escobar did it.

Anyway, then I thought, it would be cool if Bitcoin was around during that time because they could easily store all that value in a USB drive.  Lol.

Then it occured to me...  Drug cartels today are bigger and better, what's stopping them from buying all the BTC they can get their hands on?

What do you guys think?