Many have argued about the possible relationship between cryptocurrencies and money laundering. There have been cases of terrorist agents who have used Bitcoin as a means to obtain income. But are cryptocurrencies truly a money laundering ordeal? Is it as easy as they say to do this with the crypts? In the present article we will discuss a bit about this. We hope it helps.
As money laundering we understand any kind of process that will achieve «clean up» the illicitly obtained capital, diverting it from its criminal origin. Thus, it can be used in the legal economy as capital. According to the Vice Presidency of Supervision of Preventive Processes of the Mexican Government, we can define it as:
It is the process through which the origin of the funds generated through the exercise of some illegal activities is concealed (the most common of which are drug or narcotics trafficking, arms smuggling, corruption, fraud, human trafficking, prostitution, extortion, piracy, tax evasion and terrorism). The objective of the operation, which is usually carried out at various levels, is to make the funds or assets obtained through illicit activities appear as the result of legitimate activities and circulate without problem in the financial system.
According to this definition, we can understand then that money laundering is a process where the true origin of a capital is hidden, since this is illegal and would make it impossible to use it in the regular economy.
Since its inception, cryptocurrencies have been frowned upon and identified with money laundering. This being that one of the main elements of cryptocurrencies (anonymity) is an element that facilitates the task of criminals when laundering a capital of illegal origin. However, this is not something that you started with the cryptocurrencies, nor that you have stopped in the banking sector with your arrival.
The banking centers, and their best known officials, have spoken negatively about cryptocurrencies since always. In spite of this prejudice, we have observed how its use has normalized nowadays, with whole countries accepting cryptocurrencies as a means of regular payment. Many people use crypts as a method of saving, to increase their capital over time. Even so, multiple executives and spokespersons of multiple banks have had a negative opinion or comment about Bitcoin and other cryptoactives.
Studies from Delft University, in the Netherlands, have shown that, while it may be feasible in extreme cases and with experts, laundering money with Bitcoin or other crypto-active agents, it is almost impossible to do so without being tracked. It is necessary a knowledge about the Deep Web and tools that not many know how to manage to do it. And if with this we include the recent regulations on exchanges and the changes in security that have been glimpsed, these possibilities diminish.
Although many have been regulations for decades in the banking sector, being that the first cases of money laundering were with the cash and the traditional banking sector. But this does not mean that there have not been cases of money laundering at present.
Just two years ago, it was visualized how the banking sector remains vulnerable to money laundering. The case of the Panama Papers moved the world, with more than 500 internationally recognized banks involved in the case through Mossack Fonseca. Some 214,000 companies were helped by this company and financial companies to divert funds and launder illegal money.
JP Morgan, Santander, Sabadell, Goldman Sachs, subsidiaries of HSBC, BBVA, are some of the banks involved in Panama Papers cases. They allowed for the proliferation of tax evasion and the regularization of illegitimate money, and these are only the cases that have been investigated and brought to light.
So, we can say that no financial entity can be completely away from money laundering cases, and that both the Bank and different financial means, such as cryptocurrencies, can see cases of illegitimate use of their services. However, this does not mean that the medium as such is illegal, and that the existence of this type of situation proliferates.