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Why is Bitcoin still not used for money laundering?

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Nov, 12 2020

Nov, 12 2020

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Why is Bitcoin still not used for money laundering?

With the cryptocurrency demand going on in society, cases of money laundering are also increasing. Bitcoins have been increasing popularly over the past so many years and along with earning money comes the concept of money laundering of the cryptocurrencies.


What is termed as money laundering?

Money laundering puts up as transferring money that comes from illegal activities and changing it into legitimate channels for disguising its original places. The need for money laundering is only in hiding the origin of the money.

It has been found that over centuries the Treasury Department has been requiring money transmitters for registering with FinCEN and enacting measures for controlling money laundering. However, in the case of Bitcoin, it has been argued that Bitcoin can remain unregulated and it is not subject to any kind of regulations. This is because Bitcoin is not Government currency and acts more like a bartering tool.


Working with Bitcoins and why they are not used for money laundering?

It is possible to convert any currency or any amount into Bitcoins the moment you are buying them. This can lead to people illegally selling services or products only using Bitcoins or also purchasing digital currency using the regular fiat currency. This way one avoids using actual currency or converting into fiat currency makes it less likely for the criminal activities to be seen.


The only reason that Bitcoin is still not used for money laundering is that it is not capable of giving enough privacy than what is provided by all other cryptocurrencies. When using Bitcoins, it becomes very easy in recognizing all who are doing that. FinCEN has been sending letters to all the companies making use of Bitcoin to fall under the money transmitter definition. This is something not acceptable to businesses at all because of which they have either thought of coming into compliance or shut their business down rather than losing their privacy.


If you are into the Bitcoin business, you may want to seek the guidance of a local attorney having experience in banking regulations. If you are interested in testing the Treasury Department, and if you are facing a government demand letter, then the best option is accepting compliance at that time. So even though Bitcoin is always going to be connected to the markets, it is just a reminder that Bitcoin cannot be used as a tool by criminals while applying to legacy systems of the world.


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Crypto Business World

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