Tag: money laundering

  • U.S. Government is Blacklisting the Bitcoin Addresses

    U.S. Government is Blacklisting the Bitcoin Addresses

    2 min read

    Blacklisting the Bitcoin Addresses

    The blacklisting results are three sanctioned Chinese persons and 11 Bitcoin addresses and 1 Litecoin address added to this list for now.  The U.S. government said that is investigating criminal activity linked with Bitcoin and other cryptocurrencies.

    Experts are expecting more and more similar activities. On Wednesday, the Treasury Department issued sanctions against three Chinese because they were allegedly using Bitcoin for laundering profits from drug selling.

    The Treasury’s Office of Foreign Assets Control (OFAC) by adding 12 crypto coins addresses more, ensure that no one in the US can make business with people behind any of those addresses.

    This action isn’t the first blacklisting.

    During the past year, it is second. The first was against Iranian residents 8 or 9 months ago. On November last year, OFAC issued a sentence for two Iranians with the same arguments – laundering dirty money using Bitcoin.
    The unprecedented move happened last year. That was the first time ever, the US government has attached two Bitcoin addresses to a list of sanctions. The addresses were linked to those Iranians who ran an ad-hoc crypto exchange. 

    So, we have to remind you that Bitcoin or any other crypto is anonymous as many people like to believe. 

    Traders-Paradise recently wrote about that HERE 

    The newly revealed addresses are, as the previous two,  listed on the Specially Designated Nationals list. All with their names, email and physical address.
    The addresses are linked to two Iranian nationals who ran an ad-hoc crypto exchange in the country. Their bitcoin addresses are now listed on the Specially Designated Nationals list alongside their names, email addresses, and physical address.

    In a  statement last year, the US Treasury Department revealed:

    “We are publishing digital currency addresses to identify illicit actors operating in the digital currency space. Treasury will aggressively pursue Iran and other rogue regimes attempting to exploit digital currencies and weaknesses in cyber and AML/CFT safeguards to further their nefarious objectives.”

    These actions are the beginning of larger activities, said to Chainalysis Global Head of Policy Jesse Spiro. This kind of criminals collected about $4.3 billion in 2019 so far, stated the new statement

    “We anticipate further action by OFAC to include additional cryptocurrency addresses attributed to these individuals and others that are involved in narcotics trafficking going forward,” Spiro said to Decrypt. He pointed out that those cases confirm the need for “strict cryptocurrency compliance programs to immediately identify high-risk behavior and activity.”

    So, we can expect more blacklisting the Bitcoin addresses in the future.

    The criminal and money laundering are problems by their nature. The other problem is cryptocurrency lost in these crimes.

    “As lawmakers and regulators focus their attention on the industry, it is more critical than ever that cryptocurrency businesses demonstrate compliance best practices,” said John Dempsey, VP in Chainalysis. “Every minute counts when managing exposure to sanctioned entities, hacked funds, darknet markets, and other illicit activities.”

    The US exchanges are now obliged to screen for blocked persons. Contrary, anyone who breaks these sanctions can face penalties up to $10 million and criminal charges, also.

    “By having such procedures in place, institutions and exchanges can work with governments and law enforcement in detecting and preventing such illicit activities,” stated Spiro.

    The regulations are a necessity for the crypto ecosystem. How it will keep the anonymity of transactions is another question. And we have to ask, will they blacklist banks which launder money?

  • Bitcoin Usage for Laundering the Dirty Money

    Bitcoin Usage for Laundering the Dirty Money

    Bitcoin Usage for Laundering the Dirty Money
    The military wing of Hamas, the Gaza-based Brigades called their patrons to send them money using Bitcoin

    By Guy Avtalyon

    Bitcoin usage for laundering the dirty money is made much more often than anyone can expect. Criminals utilize the fast-moving speed of technological development with financial transactions. That fact was confirmed many times until now. They are totally ready and educated to handle new payment methods and cryptocurrencies are extremely interesting for them.

    The criminals are using cryptocurrency to launder the incomes of their criminal activities, of course. The most popular is Bitcoin, of course. But not due to its nature. The reason is there are so many exchanges where they can exchange their dirty money for bitcoins.

    Their opinion is that it is easy to hide tracks of transactions just because one of the main characteristics of Bitcoin is anonymity. That way, they can hide the source of income and send cryptos all over the world without exposure to the law. 

    As Bitcoin appeared, meaning since 2009, more than $2,5 billion of dirty money was laundered through Bitcoin. But, Bitcoin usage for laundering dirty money requires much more knowledge and money.

    The chain of mistakes

    The first mistake in their minds and education and overall knowledge about crypto – it isn’t so hard to hide the tracks of transactions. Actually, it is quite easy to link Bitcoin transactions and identify the criminals. Blockchain, the technology behind the Bitcoin, is entirely transparent and browsable by literally anyone.

    The criminals are not so good artists and that’s why those stupid idiots are constantly caught for using Bitcoin in illegal activities. The point is that Bitcoin isn’t anonymous in the sense of their opinions.

    The truth is, there is hardly any crypto on the market that is able to hide identities when making transactions.
    But how do they do that? Of course, we will never disclose all their tricks here even if we know a lot about them.

    First of all, they are using the dark web.

    For example, criminals divide Bitcoin after purchasing it and reassemble it with the help of so-called “tumblers”. Tumblers are. let’s say, bitcoin mixers. Their task is to clean that dirty crypto bought with dirty money or received as dirty already as payment for criminal jobs. How do they do it?

    Tumblers are spreading that crypto on different addresses and wallets. It is necessary to have just one wallet on the so-called clearnet, and a few hosted on the dark web. No more details. That will be all about Bitcoin usage for laundering dirty money.

     

    This service isn’t cheap, the fees are ranged from 1-3% of the whole amount.

    Hamas practices Bitcoin usage for laundering dirty money

    Criminals of all colors and sorts are trying to launder their dirty money. Recently, Hamas is embracing the Bitcoin. They developed a complex cryptocurrency system to raise funds from sponsors and hide the evidence. The military wing of Hamas, the Gaza-based Izz El-Deen al-Qassam Brigades called their patrons to send them money using Bitcoin. 

     

    The fundraising operations are revealed online at the end of January this year. After so many misuses by one or the other sort of criminals, we have on the crypto-scene new ones – terrorists. For the terrorist’s group’s dark purposes, Bitcoin is useful to raise funds. 

    Hamas is one of them. Hamas rises money in Bitcoin. Its Izz El-Deen al-Qassam Brigades is a terrorist group proscribed by many countries, among others, the United States, Israel, and the European Union. In truth, sending funds to Hamas is prohibited in those regions.

    The complexity in Hamas’ work lies in Its website which is generating a new digital wallet with each transaction.

    Far more complex to track transactions but not impossible. 

    So, they were caught.

    A leading blockchain analysis firm Elliptic identified them. They discovered where the cash came from, and also, what the Al-Qassam Brigades did with the contributions. Elliptic found that the bulk of the transferred bitcoins came from a “single, major cryptocurrency exchange”. The point is that analysts didn’t have such a hard task to track cash supplying Hamas. 

    Yet, Hamas has to figure out how to use Bitcoin smarter and hide the tracks better. This terrorist group was targeting an international audience and supporters.

    Nevertheless, the scheme employed by this terrorist group reveals the weakness of cryptocurrencies. Bitcoin has already suffered criticism in the past over suspicious websites where people have used this crypto to purchase drugs and guns, or for money laundering. Without regulations in this sector, it is quite possible for terrorists to collect money, to receive donations from sponsors, to send money over the globe, and finance their nefarious activities.

    Happily, there are so many other ways to use Bitcoin for the right purpose.

  • Danske Bank Closed Branch in Estonia – Money Laundering Scandal Saga

    Danske Bank Closed Branch in Estonia – Money Laundering Scandal Saga

    1 min read

    Danske Bank Closed Branch in Estonia - Money Laundering Scandal Saga

    Danske Bank in Tallinn, Estonia

    Estonia ordered Danske Bank to close its local branch within months on Tuesday.

    Danish and Estonian regulators faced an EU investigation into their efforts to prevent one of the largest money laundering scandals ever.

    Danske Bank’s Estonian branch was found to have helped funnel some 200 billion euros ($226 billion) in suspicious payments from Russia, ex-Soviet states and elsewhere.

    According to OCCRP (Organized Crime and Corruption Reporting Project), Danske Bank Estonia is already implicated in other money-laundering schemes, involving billions of dollars from Azerbaijan flowing through the branch, some of which ended up in the pockets of European politicians who praised the Baku regime, a chronic human rights abuser.

    Another investigation, the Russian Laundromat, revealed that US $20–80 billion was moved out of Russia through a network of global banks, including Danske.

    Danske Bank Estonia is already implicated in other money-laundering schemes, involving billions of dollars from Azerbaijan flowing through the branch.

    This ultimatum was made public as Danish and Estonian regulators found on Tuesday they are being investigated by the European Union’s own banking watchdog.

    Laundry and run

    The Danish bank is being investigated in Estonia, the US, Denmark, the UK, and France for handling billions of dollars that flowed through its Estonian branch on behalf of non-residents from Russia and other former Soviet states between 2007 and 2015.

    One of the banks mentioned was the little-known Promsberbank, based near Moscow, that lost its license in 2015. Promsberbank collapsed in 2016 after it transpired that some three billion roubles had disappeared from its accounts.

    One of Promsberbank’s board members was Vladimir Putin’s cousin, Igor Putin. It looks he was involved in the Russian Laundromat scheme.

    The Danske Bank case focuses on money moved between 2007 and 2015. The questions about the supervision of the Danish bank were raised, prompting the EU’s executive European Commission to ask the European Banking Authority (EBA) to investigate.

    The EBA’s investigation will take two months, and if it finds a breach of EU law, it can make recommendations to the two regulators to address failings.

    Danske Bank is not alone

    Swedish television said it had uncovered documents connecting the bank to suspicious transactions with Danske in Estonia.
    And Swedbank defended its money laundering rules and controls.

    Swedbank spokesman Gabriel Francke Rodau said that fighting money laundering was one of Swedbank’s highest priorities.

    “We are comfortable with the systems and processes we have to prevent and avert money laundering. When we get signals, we act,” he said.

    The Swedish TV (SVT)  said that transactions by 50 of Swedbank’s clients should have raised red flags as they were companies with no visible operations, had unknown beneficial owners or were represented by suspected “goalkeepers”, people who only provide a front for an organization.

    “The investigation covers more than 1,000 of Swedbank’s clients in high-risk countries who are known from the money laundering scandal in Danske Bank,” SVT states on its website.

    The bottom line

    So, as we can see, criminals don’t need bitcoin to launder money.
    Traditional banks and fiat are good enough for that.

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