Bitcoin + Criminals= Are They A Perfect Match?

If there is one thing that criminals need more than anything, it is anonymity. They have to make big moves while leaving undetectable foot prints. Since the beginning of time there has been criminals. And since there has been criminals, there has been dirty money. From the mob bosses to the drug king pins, they all come with cash, other peoples money that they gained by way of illegal activity. Numerous methods have been deployed to keep this flow of cash off the radar of the powers that be. But as the saying goes, “More money, more problems.” While criminals love the steady influx of dough, having a way to move it and a place to put it becomes increasingly difficult when it’s pouring in in abundance.

Over the course of history, various methods have been used to mask the true source of money that was earned through illegal activity. Most notably, money laundering. This act involves taking dirty money and filtering it through what appears to be a legitimate business and therefore making the money ‘clean’. Criminals will use preexisting, legitimate businesses as the supposed source of the dirty money in hopes to keep it off the radar of federal agencies like the F.B.I. In the late 70’s and early 80’s however, money laundering was becoming big business and the banks were turning a blind eye to it because the steady influx of cash deposits made them more able to provide loans to customers, which in turn creates revenue for the bank. But with all this exposure, law enforcement caught wind and started cracking down. Several policies were put into place in an attempt to halt money laundering. Banks were now mandated by law to report deposits greater than $10,000 in cash. This was certainly no deterrent for the criminals however. For one, many banks just ignored the new laws. It was too beneficial to them to allow the deposits. When many banks did eventually conform and start following the implemented ruling, criminals just worked around it by making deposits just shy of $10,000. As the criminals got smarter, so did the law. Now, it is harder than ever to possess large quantities of cash without anyone knowing about it. Cash money is untraceable which is why it appeals to those committing illegal activities. But it is a physical thing that must be kept somewhere. As with anything in life, pros and cons.

Now we live in this digital age and even the proverbial bad guys make use of technology and, more specifically, the internet. In walks Bitcoin. Bitcoins can loosely be described as digital currency. They will never be held in your hand like a dollar bill, but they are just as real. Bitcoins are used online as a form of non-government regulated currency. They can be obtained by trading real money for them. They can also be gained through a process called mining. Either way one comes to obtain them, they can be used online for purchase of anything so long as the seller is willing to accept Bitcoin as payment.

So how is Bitcoin useful for illegal activity? Well, it is really quite simple. When someone is providing a product (like drugs perhaps) or a service (prostitution for example) a payment will be made to the person providing said goods or service. Because they are trying to avoid their illegal activity being traced back to them, criminals are not too keen on taking any form of payment that will leave a paper trail. Cash is typically king but with the above-mentioned problems that arise from it, online currency, like Bitcoin, has been a welcome addition to the currency game. It is not to say that Bitcoin is completely untraceable. It operates on a very sophisticated platform. And like anything on the internet, if the right person who knows their way around a determined to find something out, they will. However, while a Bitcoin transaction can be traced to some degree, the person or persons involved in that transaction are not as easily detectable. So while it may be possible to locate point A and point B of a Bitcoin transaction, who sits at both of those locations is virtually untraceable. This anonymity allows transactions of any denomination to take place between two people with hardly any risk of discovery.

Now, it is not to say that any drug dealer with half a brain cell and a working internet connection can start using Bitcoin with zero risk of detection. Like everything on the internet, there is always a detectable source. It does require one to really understand the Bitcoin system and know the ways to keep the profits moving to avoid being caught.

While this digital currency is no doubt being used for illegal activity (just like all forms of currency are), there are also plenty of legal ways it is being used that are highly beneficial.