Topic: What does cryptocurrency money laundering means??? (Read 3299 times)

No!
I'll be very precise.
Laundering money is giving money of illegal origin a clean origin.

Buying BTC or cryptos, and mixing cannot launder money.
Having laundered money is being able to go to a bank with a thick stack of banknotes, the teller asks you where the money is from, and you have an explanation to give him which he will believe.
If you cannot answer the banker's questions about the origin of the money, it has not been laundered.

It literally means washing dirty money to make it clean with the use of cryptocurrency. This concept applies to money that can be obtained illegally like drugs, human trafficking, prostitution, corruption, extortion, thievery, etc. and then use the funds to buy Bitcoin and other coins available in the cryptocurrency market.

The main idea is to make the funds legitimate although its source can be illegitimate. Now, I just want to add the fact that this problem is not new as money laundering has been going since the money was invented. It just came into focus during this time because of the supposed-to-be anonymity of the cryptocurrency framework which really attracted many launderers into it.

Traders on the stock exchange need a licence, so we would need one too. If you trade currencies of any kind, the authorities are going to want to know who you are. Know enough about the financial world and the legal aspects of it and things like this are assumed.

actually, cryptocurrency is just like forex trading. people mix both cryptocurrency and money laundering concept. if you have the ability to trade well, then you can make money easily. yes, there are few cases of money laundering but you need to connect with well-reputed company/website.

Basically, if you're holding onto black money in the form of cryptocurrencies or converting that money into crypto coins, it comes in as money-laundering.
If you're going to do any illegal activities using cryptocurrencies, they are ultimately coming under Money-laundering.

There are services that slow things down, but there are transparent too.  A mixer that publicly shows a 10% fee, has $100,000 come in in one or many TX's, all in the same general 50 hours period and any computer can lump and scramble the outputs for a three week period and find the $90,000 group of outputs and the fact that they all go  to the same handful of wallets, duh?
 

I understand  money laundering as the integration of illegal money or goods into the
legal economic system. Basically washing dirty money to make it clean. To launder money through crypto currencies would involve using your ill gotten gains to buy crypto currencies with the intention of hiding the source of the money.

For example, you scam someone of 10 btc, you obfuscate it with a mixer, then deposit it into a gambling website, then withdraw it later as winnings to make it all look legal. There are tons of ways to do this, and crypto currencies make it easier to do, although they are not 100% fool proof.

Bitcoin made this easy when it first came out because there was little understand of how transparent the block chain is.  Forget the TV's, I send you $80,000 worth of BTC for your $100,000 cash and you cash out later.  Once the silk road guys and the first couple big players got caught, law enforcement had a full understanding that anonymous is great, but it is a fully visible ledger.

So, I sell you 1,000 TV's for your $100,000, and you open a quick eBay shop selling TV's, the cops even poke into your house/business and it is just you and your legit TV business.  A little too direct, but it works.  Now, the heat is off you and I go to your eBay or your website and buy the same TV's back for $80,000.  The money appers clean, the $20,000 is my fee and you have a direct paper trail of legitimate money, there should be more steps and more distance, but point illustrated.

No, you are mistaken. You do not need go through a business' taxes for laundering.
Laundering is the act of attempting to convert "tainted money" into "non-tainted" money.
It is the attempt/performance of the act itself, not the success of the act.

If I have dirty money, buy bitcoins p2p and sell those coins p2p for fiat in another location,
when I receive new fiat from a new individual, that is not associated with the original crime,
it is laundering. You do not need a business or other large operation to fall under laundering.
If you had knowledge the first fiat was dirty, then almost all other action that follow is
automatically laundering, even using that money in a convenience store for a single can of pop.
Under current interpretation of law, conversion into any form of property could be laundering.

What your example is actually describing is not the act of laundering, but a more sophisticated
system devised (usually by criminal organizations) in order to hide the act of large amounts of
laundering, so that conversion is from physical dirty money into electronic banking money.  
This type of money laundering is the most advanced form and provides the "cleanest" banking
money.

So, as I said, laundering is the act of attempting to hide or mix with knowledge of a "crime",
as opposed to only the advanced obfuscation through fraudulent tax reporting. Average
citizens can be accused and found guilty of money laundering without using a business,
without using tax reporting, and sometimes even without willful knowledge (there have
been times courts have asserted that an individual who participated "should have
known" they were involved in a crime or laundering ring, though they may have been
truly ignorant (more common with poor to low income youth/young adults).

So money laundering as you describe, is more complicated and not as specific as
you would believe. It can be performed in many different ways.




You have provided no answer either towards the "cryptocurrency" aspect nor "laundering".
First, the OP's question refers to "cryptocurrency money laundering", you ignored that.
Second, "Sitting on $100,000 from killing someone" is not laundering in any way.

Laundering occurs when you attempt to hide the origins of the $100,000 by conversion.
So for someone who claims I missed the mark, it is evident you do not know law nor english.


Edits: spelling and elaborations.

For a bunch of smart guys, you really miss the mark.  First off, to explain, forget the Bitcoin thing.  You just killed someone for $100,000, the cops are all over the area of the city, watching people, watching money and you sitting on $100,000 is a dead give away. 

I'm guessing this means the use of a cryptocurrency (like Bitcoin etc.) to money launder. For example, I retrieved a huge amount of money like $1,000 through illegal means. Money laundering means concealment of the origins by the means of transferring. So one may exchange the $1,000 to a cryptocurrency like Bitcoin so that it won't be traced from its illegal source, hence money laundering. This is just from my understanding, please correct me if I'm wrong!

Actually, there's no laundering in your scheme. It's dirty money at the beginning, and it's still dirty at the end. Mixing is useless.

To launder the money, it would require to make it pass through some kind of legitimate business.
Imagine you create a carpet cleaning company, or that you are a mechanic making oil changes. Your income for a given month is $1,000 but you add the $10,000 in BTC, and you fill tax forms telling your income was $11,000. This is money laundering, because the money now looks like normal income from a registered company.

If it were only that easy. The line between legal and illegal is very thin. I advise you to read about some cases of illegal money transmitting. People who were trading BTC were even put in jail because they were operating without a license and they didn't even know they needed one, since BTC wasn't treated as money and the laws were just being made. IMO it was an abuse on the government's part, but we can complain after a fact and it won't change anything if we're already behind bars.

The only difference between trading and laundering, is that trading starts with money that was not gotten by illegal means.

If you never do anything illegal, you have nothing to worry about.

In my understanding, it is tax evasion using crypto-coins or storing of unaccounted money (i.e black money) in crypto-coin format. Recently, there was a demonetization exercise in India. A lot of unaccounted money holders were rushing to convert their cash to BTC.

It means taking or allowing cash/credit that was used from a crime/illegal act/theft and using that to purchase either
bitcoins or altcoins, in order to hide the links from the original crime/
illegal act/theft.

Bitcoin currency can basically be used for various transactions. For example for legal transactions like at wordpress.com, virgin galatic airways, republikhost.com, and various social donations such as to wikileaks. But it can also be used for illegal interests that are larger in the international portion.Such illegal acts include money laundering, gambling, illicit drugs, and even protitution.

Bitcoin or other cryptocurrencies are not considered as money laundering because you have to pay taxes at the time of the transaction. It is considered money laundering only if you are annoying to evade paying taxes to the authorities.

Anything related to exchanges between cryptocurrencies is legal in America as long as the activity you are doing with them is itself legal.  Money laundering is not legal.

However, because in the literal sense it is legal afterall stock trading is also legal but technically, it might not be legal especially in a case where the law is not fully plain about crypto-currency and there is no way they can really determine your income from such trade to understand whether you are disclosing the right amount of income or not should in case you decide you want to pay tax or not or when IRS is ready to investigate your source of money.

ok... so if i earned my money legally....( worked for it) and decided to invest few $ in bitcoin, then traded for other coins, then (ex. sell it for a lot more and made few $ then) it is legal... correct? it is considered trading.
is this also legal in state of new york?

thank you all

Buying Bitcoin and spending Bitcoin is obviously not money laundering, governments tend to be concerned because it's very easy to do money laundering with Bitcoin (which it is, you just buy some Bitcoin, put it in Bitmixer or a gambling site, cash it out and boom it's clean money).

If you're not actually doing anything illegal, the government doesn't care.  If you are, good luck as long as it's not hurting anyone, and you would usually get away with it.  Money laundering just means covering your tracks and trying to get money that wasn't involved in crimes so that the crimes can't be traced back to you.

I don't agree with your words because cryptocurrency is same like Forex trading, why I don't know many people keep talking about cryptocurrency are money laundering, if you are good at trading then you will make good money. Only a few cryptocurrency are cheating people by launching ICO, this makes people think that cryptocurrency is money laundering.

you can effectively make the first case proposed in this one you mentioned, i mean steal the money from a bank, buy bitcoin with those, convert them with a mixer to another altcoin, and leave all the trace back

this is money laundering but none will ever know about it because there is no trace thanks to some anonymous coins, this is the big problem the government want to fight

FlamingFingers is correct.
If the money you use for crypto trading is your money from legal means,
then it usually does not fall under "money laundering".

In this case, money laundering only exists because it is NOT your money but you
are trying to hide it from any criminal investigators.




Olubams is correct here as well, but for a different reason than above.
The distinction is that if you need to pay taxes on some type of your money
and instead you do not pay your taxes and invest that money into cryptocoins
in order to help hide this money and prevent "pull backs" and etc., then you
are tax evading by money laundering.

In this case, money laundering exists because it is your money but you are trying
to hide the taxable assets from your government.


**Also, as a reminder, in some jurisdictions, you do not need to pay any taxes on your
cryptocoins UNLESS you convert your cryptocoins back into fiat. It is your responsibility
to keep track of your gains and losses over the years, and if you "cash out" your coins for
fiat, you are required by law to declare your gain or losses in that year's taxes.

It will only be considered money laundering to the best of my knowledge if you are trying avoid paying the necessary dues to government. There is a laws that says you can't carry more than $10000 or even transfer more than that at with the exception that when you do, you must be ready to explain where it came from all else it will be regarded as money laundering so its all about disclosure and what the law says...

No, it is not considered money laundry. It's just an investing/trading action, but instead of investing/trading on Forex, for example, you invested/traded in digital currencies. Of course, if your money is hard-earned.

ok so if u didnt steel money... just invested it in bitcoin then traded for exmaple: monero or dash and sold it for a lot more is not considered money laundry? am i correct?

The concept could mean different things to different people, but basically
would be something along the following lines: "Taking or allowing cash/credit
that was used from a crime/illegal act/theft and using that to purchase either
bitcoins or altcoins, in order to hide the links from the original crime/
illegal act/theft.

For example, I steal 10,000 USD from a bank, I then buy bitcoins with all
the money on localbitcoins or with other p2p cash trades. Eventually, I will
have around 10,000 USD converted into bitcoins. I then use those bitcoins to buy
other altcoins to mix them more, possibly monero, and then reconvert back into
bitcoins, where I now sell those bitcoins on localbitcoins or other p2p cash trades.
When I receive new money that is not associated with the original 10,000 USD,
I have "laundered" that money.

Besides committing the original crime, laundering would be an additional crime.

What does cryptocurrency money laundering means???  examples please... Thank you