
Ten arrested in Netherlands over Bitcoin money-laundering allegations - edward
http://www.theguardian.com/technology/2016/jan/20/bitcoin-netherlands-arrests-cars-cash-ecstasy
======
yason
It sounds to me that Bitcoin is a lousy medium for money laundering. It's
unclear to me whether they laundered money by supposedly buying and selling
bitcoins or converted shadowy assets into BTC and then back to physical
currency, but in both cases the transactions can be tracked back in the
blockchain so you'll not only have to make a good story of where the money
came from but also, if and when the authorities get interested, make sure that
how the BTC is moved around reflects that story.

But merely converting BTC to cash via ATMs doesn't even sound like laundering
to me at all, just conversion. You would still need to explain the cash you've
acquired if you intend to buy something with it.

Money laundering itself is not for those in a hurry. To plausibly launder
money you need a service business with costs that are rather fixed and
customers who can plausibly pay with cash. Then you can have as many
"customers" as you like and nobody can really tell how many you really might
have had but depending on how you set up the scheme you can report a
reasonable income over the months and years, pay the taxes and thus turn the
money legally earned.

~~~
arianvanp
Yeh, sadly enough the Dutch media and government try to totally hide this in
their stories. Bitcoin == Money laundering, and TOR == THE DARK WEB. Period.
[0]

The article is full of misdirections and word plays.

It starts of with "Bitcoin is used by criminals, because the currency is not
controlled by banks and thus there is no supervision". This is the first
misdirection, because just because it's not controlled by banks doesn't mean
you cannot supervise it. The core idea of bitcoin _is_ supervision. It's a
public ledger.

It then continues to support their argument by saying "Bitcoins go back and
forth in a _closed_ system of users, so authorities can't see it". Which is
just a plain lie. Bitcoin is an _open_ system. Anyone can see any transaction.

The article continues: "As soon as the bitcoins were turned into real cash,
the money was turned into cash at banks. They finally stepped to the police,
because their warning systems detected large amounts of money being
transferred".

So apparently it _was_ really easy to track down? They detected the weird
transfers and were able to find the criminals. Seems bitcoin actually saved us
here? That totally is the opposite of what they told us two paragraphs back
where they said "there is no insight at all in what happens with bitcoin"

The article then continues to mumble about how TOR == Dark web and it's just
painful to read. I hate media. Now my mom starts asking me akward questions
about hard drugs because I have a TOR and a Bitcoin sticker on my laptop.

[0] [http://nos.nl/artikel/2081531-bitcoins-en-dark-web-een-
goed-...](http://nos.nl/artikel/2081531-bitcoins-en-dark-web-een-goed-
huwelijk.html)

~~~
icebraining
The idea that money laundering can happen in Bitcoin because it's not
controlled by banks is particularly good. Maybe we should get a large, trusted
bank like HSBC to regulate Bitcoin? Oh, wait:
[https://en.wikipedia.org/wiki/HSBC#Money_laundering](https://en.wikipedia.org/wiki/HSBC#Money_laundering)

~~~
hackerboos
So HSBC were fined $1.9 billion by US regulators and 40 million Swiss francs
by Swiss regulators. Who do we fine for money laundering on the blockchain?

~~~
icebraining
The people who were arrested, as per the article in discussion?

------
patrickaljord
They were arrested for drug traffic, not bitcoin money-laundering.

> The alarm had been raised by banks which had seen “large sums of money”
> being deposited before being immediately withdrawn at cashpoints.

Not the smartest individuals here. How did they think they wouldn't get
caught? Seems like another anti-bitcoin peace article which ends with the mt
gox failure and this gem: "Bitcoin’s reputation was also damaged when US
authorities seized funds as part of an investigation into the online black
market Silk Road.". So that means the dollar and euro's reputation are damaged
every day when funds are seized as part of 99.9% of criminal investigations?

------
dawnbreez
I've researched BTC laundering, because I'm too curious to live.

The main method of doing it is via "mixers", servicss that distribute your BTC
among hundreds of accounts, and then pay you back (minus a small fee) via
hundreds of other accounts. Theoretically, it's impossible to track a single
payment through such a process, since the BTC paid back isn't the BTC paid in.

Another possible security measure woukd be the use of multiple accounts,
allowing legitimate purchases and purchases involving physical locations to be
separate from illegitimate buys.

The main weak point is your location; once a physical object is shipped to
you, it's real easy to tie that to your illicit BTC wallet, and from there,
you're hosed.

------
at-fates-hands
Interesting everybody pointing out that BTC is traced through the public block
chain - but what about BTC tumblers/mixers that are designed specifically to
anonymize BTC transactions?

I remember one Reddit thread where they chased some huge amount of BTC which
were stolen and ended up losing them in one of these:

[https://www.reddit.com/r/SheepMarketplace/comments/1rvlft/i_...](https://www.reddit.com/r/SheepMarketplace/comments/1rvlft/i_just_chased_him_through_a_bitcoin_tumbler_and)

As far as I know the thief got away with it.

------
ryanlol
Is there any articles that clarify what these guys were actually doing to make
the money?

The fact that they don't mention it makes it sound like they might have been
doing something more interesting than just selling drugs, as usually they tend
to be fairly public about those cases.

Edit: Guess it was just some drug dealers then,

>All suspects fell into one of two categories – criminal “traders” on the Dark
Web and “bitcoin-cashers” who are paid by these traders to exchange bitcoins
for cash

------
DonHopkins
"Bitcoin’s reputation was also damaged when US authorities seized funds as
part of an investigation into the online black market Silk Road."

If by "seized" they mean "stole". Notice how they spin the fact that US
authorities were charged and prosecuted for STEALING bitcoins while
investigating Silk Road into the fiction that it damaged the reputation of
Bitcoin, but not US authorities.

~~~
ikeboy
That's not the fact that was "spun" into the sentence you quoted.

They're clearly talking about the money the government seized from SR
publicly, not the money rogue agents took. To claim that they're somehow
talking about the second while neglecting the first is itself spin on your
part.

You can perhaps criticize them for not mentioning the second at all, but
that's different from the critique you made.

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thegizmopro
This article is a piece of garbage.

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branchless
Should have done it thru London property, then the establishment get a cut.

