According to a recent report, less than 1% of all bitcoin transactions involve money laundering

in #bitcoin3 years ago

In a recent report by the FDD and Ellicit, a bitcoin forensics company, it was shown that less than 1% of all bitcoin transactions were involved in some form of money laundering.

Let that sink in for a moment...

Less than 1%!

I am not exactly sure how they were able to come up with that number, but I would imagine and venture to say that much more than 1% of all cash transactions are involved in some sort of money laundering, but that is just an outright guess on my part.

Given that, should we outlaw cash?!

That is the line of thinking that many of bitcoin's critics have used to throw cold water on the bitcoin idea.

Some information about the report:

The report was written by FDD and Ellicit (the former of which can be found here: in order to help analyze and show the flow of funds using the bitcoin network.

The results indicate that money laundering isn't nearly the problem that some people think it is.

Specifically, this was a quote form the report:

“The amount of observed Bitcoin laundering is small and darknet marketplaces such as Silk Road and, later, AlphaBay are generally the source of almost all of the illicit Bitcoins laundered through conversion services.”


Which basically means, get rid of such marketplaces, and the amount of money laundering drops significantly. Judging by recent US regulatory action, I would imagine that they know this already.

Surprisingly, or not surprisingly depending on your view point, the vast majority of money laundering was said to be coming from Europe.

*According to the report, more than 5 times as many illicit bitcoin transactions take place in Europe vs. North America.

Their suggestion?

AML and KYC regulations need to improve.

AML = Anti Money Laundering

KYC = Know Your Customer

Both of which have been heavy focuses of cryptocurrency exchanges here in the US. Where you could once open a trading account with just an email, it now requires a phone number, an email, an ID, a social security number, a hair sample, and a drop of blood. (I am joking about those last two, sort of)

According to the report:

"The only way to manage the illicit transaction is for Financial authorities in all jurisdictions to increase AML enforcement.”


Basically it sounds like they are calling for coordinated efforts across the globe to help each other combat illicit uses of cryptocurrencies.

I am assuming that is exactly what South Korea is about to do as well as several others.

Too bad China decided to bow out early and make it illegal...

Oh well, don't let the door hit you on the way... cough cough, I mean what a shame. :)

Stay informed my friends.

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The argument about the use of cryptocurrencies in money laundering and other illegal activities is partially true, but is a red herring. There is also a serious effort on the part of the financial elites in government and academia to ban cash as well, who make the same argument that cash is used for criminal activity. Bannng cash and cryptocurrencies would be a way for governments to gain more control over their citizens and monitor their every activity. It would also allow governments to do things like impose negative interest rates to coerce their people into spending if that's what the government wants them to do. Negative interest rates have been imposed in various countries but have been totally ineffective, in part because people and corporations can hold cash and other assets like gold to avoid losing money via negative interest rates.

Yeah, it's a losing battle. You cannot prevent what happens in shadows and secrecy without bearing enormous expense, restricting the rights of your citizens, or both. It is a losing battle, and one that we would all likely be best served by allowing it to happen. Spend resources to protect honest citizens from being affected by that activity. Use resources to dictate where and when it happens. Limit its effect on those who don't participate, don't spend money trying to prevent it from happening.

"Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety."

Benjamin Franklin

Amazing how easily people dismiss that phrase as "outdated". rolls eyes.

And fuck KYC/AML. It just makes my life more difficult and stops maybe 0.5 criminals.

again this is only talking about bitcoin which applicability and scalibility is questionable

There's no point in using bitcoin for any illicit activities when there are privacy-focused coins like Monero, Zcash and a host of other, less-known projects that have opaque chains.

KYC is a waste of time and introduces lots of risks for consumers as their data is hackable. Just look at waht happened to Equifax, but of course the gov. doesn't really give a shit about the consumer, they just want to be in charge of everything.

This number is definitely scary. But the thing is Governments can't just stop bitcoin usage or shut it down just because it is being used for money laundering. Money laundering has been happening for very long.Rather they should come up with a solution to it.

Would you suggest to keep Hodling LTC?

I think yes ..I'm holding LTC

Well it is still has the second cheapest transaction fee on Coinbase (bitcoin cash cheapest) so i'm sure a lot of people will continue to use it to transfer to alts...

That is why many, I am one of them, view the future will be to the ecentralized exchanges

So Bitshares is a good place to be?

what do you think the price BTS will be at Dec2018?

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The regulators aren't concerned about money laundering, except that they get their cut.

If they were, all the big banks would be shut down. They have already paid fines for money laundering. And we know they are continuing, because they have been fined again.

So, its not about money laundering, its about making sure the tax cattle cannot escape. All the little people have to stay and take their hair cut. (Like Crimea) While all the big boys, in the club, get to avoid such.

Fortunately, if the govern-cement does ban cryptos, it will only make them more valuable, and more people will use them. See any of the past prohibitions.

Yep. The tax issue is huge. I think having such an open international exchange program is making the tax collector sweat. How can you possibly track the trades and gains on exchanges who are housed everywhere throughout the globe? You pretty much have to rely on the tax payer's honesty, and they are unlikely to do that.

Especially when honesty can cost you so much.
Never speak of bitcoin and the Infernal Revolting Service will never ask you any questions.
Speak of bitcoin and they will have you over a barrel and demanding to know everything and after all that they will fine you for not doing what they said (after) in the first place.

wish I could resteem a comment after reading this

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They dont have to use bitcoin for money laundering If such currencies like monero and dash exist ))

Yep, it's pretty difficult to launder money with crypto anyways. At least on a grand scale. You can turn it into cash easy enough, but the difficulty of laundering money has never been getting cash, it's getting fiat into a legit bank account without raising eyebrows. Still not easy to do with crypto.

It will be interesting to see how cryptos for cannabis will fit into this world, as this blog says, less than 1 percent is used for money laundering. How do all the cannabis-related coins fit into this if they plan on using it for the exchange of cannabis (even legal cannabis)? Would that be considered "illicit activities" in the minds of regulators? Yet, the big banks are the biggest launderers of drug cartel money.

Ahan great news ..informative ..if it is less then 1% its very good .hope so it ll approaches to money laundering infuture ☺☺☺☺☺

That's an interesting report, but I find it somewhat hard to believe because Ethereum has been demonstrated to be using up to 65% of total network to mix/launder funds:

Well to be honest, I would rather have it used for laundering than for cryptokitties. It at least makes some sense :)

i just bought my first bitcoins today, and such posts make me so curious.
Hoping for the best though i do need to be getting some more coins, you know the drill.
LTC i guess...

"Know Your Customer" this is the only solution.If they recognize the person who deals with the transaction, they prevent money laundering.because they know who will try to raise money. @jrcornel

superb post i like it thank you for sharing

There must be improvement for this @jrcornel

Bitcoin has become an important investment vehicle with the high value it has reached. There are even those who claim that bitcoin will be the currency you will come up with in the middle of the physical money. In spite of all this, many people and institutions think that bitcoin is used in dark jobs and money laundering and are not willing to use bitcoin. The arrest warrant in Greece, in fact, revealed that this thought was not so wrong.
Greek authorities have undoubtedly arrested Alexander Vinnik, a Russian citizen he has been seeking by the US, for money laundering via bitcoin. No details were shared about the issue, as Vinnik claimed to have made about $ 4 billion in money over bitcoin. According to Bitcoin security company Wizsec, Vinnik is not the only incident.
According to Wizsec's report following the arrest report, Vinnik's Mt. There might be a finger in the Gox slob. In the heyday of 2014, the leading bitcoin trading platform Mt. In Gox, the total value was close to half a billion bucks, and about 750,000 bitcoins were almost steam. The only suspect in the incident is Mt. Gox's CEO, Mark Karpeles, was arrested in 2015. Along with the capture of Vinnik, there may also be changes in Karpeles' trial process.

This is an example, but as Bitcoin says. This is not the first time this person is guilty. So without Bitcoin, the money was cleared up. What is changing now is also laundered? The person who wants to make money can do it in a way. Government banning bitcoin will not change anything. Also as you share in our letter. I see only 1% or 99% legal money. All these money laundering transactions are realized with paper money. Therefore, 99% of money transactions are made with paper money. In short, until you attack Bitcoin. They attacked money launderers.
I'm new to Steemit too, I've just seen you. I hope you see my comment. I fallow you @jrcornel

yaah i agree!probbally 1 percent of bitcoin is use for money laundering! governament should take action to stop money loundering!

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It is simply the Big Corps finding an excuse to try to shut down Cryptocurrency. With crypto the people have the power, with fiat the banks and corps have the power. They are scared. They are all sticking together to gang up on us, which means WE ALL NEED TO STICK TOGETHER to defend! You think the people of China wanted to lose their right to trade crypto? NO! it was the big wigs telling them they cant, like parents telling their children not to do something. Crypto is much more than just currency. It is independence! It is freedom! It just makes sense! We should have a choice if we want fiat that the banks control or crypto that the people themselves control. We need to stand up and have each others backs. Be the resistance.


So how do we get it up to 2%? ;) lol jk

That why some countries refused to embrace bitcoin they knew it does not give room to money laundry, thank you for this interesting content.

What a surprise right? It's almost as if good and intelligent people are able to evaluate a solidly performing mechanism when they see one.

I had seen this report mentioned on Twitter but I appreciate the analysis here. Still trying to absorb a lot of perspective about this space. Thanks for spreading the word to us that are trying to catch up on what is developing.

Yes, The report also indicates that the vast majority of illicit transactions using Bitcoin were processed in Europe, receiving more than five times as many illicit transactions as North America.

Thats great new.
thanks for sharing.

As crypto grows is normal for it illegal uses to be a smaller %. When commerce start to run in crypto, illegal uses will be almost insignificant.

That is partially why Bitcoin was invented to begin with! To sidestep banks, and the "Man" when they're trying to extort more money from us!

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I appreciate that you and your followers are one of the genuine contributors . And i need your support by re-steeming something that's the need of the hour.

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Great update news from you. How become money laundering.?

good for crypto world,,legalty issue need more action..good one @jrcornel

Quite insignificant if that statistics is anything to go by, what then is all the hullabaloo at bitcoin by some world governments like China and South Korea?

There has been a lot of panic lately in Korea mostly as people feared that exchanges would be closed. From what I understood though the aim was to understand who is actually trading there and get grip on possible "black sheeps" which I believe is not bad at all. KYC is helping Cryptocurrency on a long term since it makes it a "legit" investment to the outside world.

I buy bitcoin - price increase - i sell - I have all profits
I buy google stock - price increase -I sell it and I paid tax and google paid its tax and broker paid his tax and your friend who work in google paid his tax

Shhh! Was that the sound of someone's "conditioned response" going off for no valid reason (again)?!
Thank you for the informative (and entertaining) post.

These people just can't be trusted specially those big crops and banks.

red hering!? call it like it is Its a LIE. many times so called Money laundering is an interpretation of free market activities by Governments that want a cut of the action. The LIE that needs to be perpetrated is that BITCOIN is a major or even minuscule vehicle for illegal trade that involves terrorism and drug traffic, ( you know like the CIA in Afghanistan).
Banks who control governments and media empires NEED for Crypto to be illegal or their control will fade over time. These monsters get involved in regulation but more so i think they are involved in the exchanges through puppets to pump and dump and cause instability. I despise them.

Wow, good information, amazing.

Bulgaria seized a stash of 200,000 BTC from criminals in May 2017 and that seizure is now worth more than 2 Billion dollars. So allowing for freely traded BTC can be quite profitable for governments with good law enforcement.

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no fee transaction, better than centralized money.. joke.

future money. kind of. i will say digital coins will change the way of living but BTC will be gone. no one will even care about btc in future.

the central money will stay forever. internet users will just have more opportunity to express them self on the internet and in the end make some money. steemit is just one good example. a new version of kick starter can be done in the same way. freelancer projects also.. the idaea of btc players is to make more people, on more ways to enter and using btc. it is all about coverting cash into btc.

..and u kids are free working class lol!

I think that is outstanding. A wonderful fact to present to someone pushing that illegal activity surrounds bit coin.


This is one of the things I am afraid of... Syndicates will use this platform to monetize their greed and wrong doings. Since the value is unexpectedly fluctuating it is easy to monopolize a coin and cash it out for bigger value.

Thanks for sharing this valuable news. Bless you!

Great post!! I just finished writing a post about the Bitcoin bubble, you might enjoy it. Check it out if you get the opportunity.

yup truly saying,i have also seen many.

That is why it is important to comply with proper identification procedures,in order to make a positive impact in the way we handle money.
The main purpose of decentralizing the economy is to take back control of finances not to find different ways to cheat the system. Unfortunately there will be creative people that feel smarter than the rest of us,that is far from the truth, if you're doing something wrong, you will be caught sooner or later, so I leave it to you to decide what is wrong and what is right. Just make it fair for everyone and we'll all be happy.

I think darknet marketplaces such as Silk Road and AlphaBay are generally the source of almost all of the illicit Bitcoins laundered through conversion services.

When it comes to money lot many good and nagative comes in and that should be normal. Even thoe 1% comes out to a huge amount but it doesn't really ring a bell to ban it completely rather than finding a way around it. Hope Indian govt reads this and start looking everything with a perspective of supporting it instead f banning.

Who knows , is it actual mining BC in 2018 ?

Excuse me..... what percentage involves money laundering in Fiat money? Dollars, to be precise?

I am not exactly sure how they were able to come up with that number

That is the problem, isn't it? If you don't know the questions (or the methods) the result is basically useless.

What is a transaction for example?

Also keep in mind that money laundering is easier done by "old" methods. Other crime is a different matter.

Lets start with the question if Crypto currency could be used as a normal curency like your dollar , baht , euro , or pesos . So first of all The worth of cypto currency is changing all the time so you could buy a house with your bitcoins oneday and on the following you would just be able to affort a Sandwitch with the same amount of Bitcoins. This does happen beacause Bitcoin or any other Crypto currency is worth anything beacause people think, beacause people believe in this projekt, Bitcoin, Litecoin, or Steemdollar do not have a worth, there are just worth anyting beacause people believe that this virtual money is worth anyting.
Second there is no equivalent in gold or anyting valuabe. ( Euro or dollar are equivalent to the gold reserves )

These reasons are enough to say that this currency, that way it exists today will never be able to be used as the "money of the future".

No wonder the value is going down. Haha

Awesome news.

Better rethink wanting to be apart of the 1%.

a few days later the digital currency will rule the world, and the real currency will become extinct, lose out in the competition

I have no doubt that cryptocurrencies are used by some to launder money, but realistically you have to think about the logistics here. Bitcoin fees have gotten out of hand, transaction times are slow (taking hours sometimes) and it has been proven that Bitcoin's lack of anonymity in particular means that government agencies can trace coins (to an extent) and potentially unmask users.

People also launder real fiat currency, so it's not a problem that is just happening in cryptocurrency. Any form of currency can and probably will be laundered, but it's such a small percentage it shouldn't even be a valid argument.

Governments and financial institutions are scared and the only arguments they have in their fight against cryptocurrencies is; terrorism, tax evasion, buying drugs, laundering money and other weak arguments.

For as long as exchanges remain a centralised point of onboarding people into cryptocurrency and you need to transfer funds from a bank account, governments will always have avenues to restrict or ban the use of cryptocurrencies.

Very interesting, I think they just like to blame Bitcoin for everything. A new sickness will come and they will probably blame

Anche con la moneta reale succede.Quindi di cosa parliamo...

Nice post :)
I am proud of you, keep on working.
It is not my intention to beg, but if you please please upvote my post as well. There is nothing wrong if we support each other. I know if you are a kind and helpful person :) @jrcornel

its not laundering once u start making profit