A blog post, published by BitMex CEO Arthur Hayes, argues that Bitcoin, the flagship cryptocurrency, isn’t the “preferred” method to launder money. In fact, the post notes that “enlightened hodlers” say that using it is not suitable for money laundering purposes all of its transactions are available on a public ledger.
Moreover, the cryptocurrency exchange’s post mentions BTC transactions are harder to liquidate compared to the USD. It adds a few real life scenarios:
“In these modern times, washing $1 million of crisp cocaine-tainted Benjamins is no easy feat. If you walk up to a teller and attempt to deposit into a bank, they most likely will turn you away or call the police. You could call Saul in New York’s diamond district and attempt to wash it through precious stones; but, fencing those diamonds at close to par will prove difficult.”
Numbers Don’t Lie
UK-based giant auditing firm PricewaterhouseCoopers (PwC) recently revealed that currently 49 percent of organizations worldwide report being a “victim” of economic crimes. A third of respondents to PwC’s survey said they had been targeted by cybercriminals while a notable 52 percent reported the crimes had been carried out by their own employees.
Notably, in April 2018 Europol, a European agency for law enforcement cooperation, reported that up to £4 billion ($5.3 billion) had been laundered by criminals using digital currencies. Getting an accurate estimate on just how much money could specifically have been laundered or is being laundered using fiat money, Bitcoin or other cryptocurrencies would be difficult.
Well-known organizations such as the Financial Action Task Force (FATF) and the United Nations Office on Drugs and Crime (UNODC) estimated that “criminal proceeds amounted to 3.6 percent of global GDP, with 2.7 percent (or $1.6 trillion) being laundered back in 2009.
Compares the $5.3 billion figure to $1.6 trillion makes it clear it would be reasonable to conclude cryptocurrencies aren’t that widely used to launder money. BitMex asserts:
“Washing money through the crypto capital markets is very difficult if you are unwilling to provide KYC information. Property is much easier, and vested interests from the government to the real estate brokers want you involved. They will do all they can to alleviate KYC / AML reporting requirements. Satoshi ain’t the biggest illegal finance enabler: no, it’s Uncle Sam.”
This is on point considering that the United States is home to established companies, like Ellis Island Capital, who have been offering US investment-based immigration programs for decades.
The investment plan is simple in most cases, with Ellis Island Capital requiring at least $500,000 worth of mainly real estate investments from foreigners to get on a convenient program to acquire US citizenship.
Interestingly, BitMEX confirms that the United States is not required to share financial data on foreigners with assets in America because the government did not ratify the Common Reporting Standard (CRS), which requires countries to keep each other informed regarding financial activities within their borders. Per BitMex, the US expects other nations to follow this, “but won’t return the favor.”
