The premise of Bitcoins is confusing to many people, but it is a virtual currency that can be spent anonymously by online users. It is bought and sold with real money in person and on exchanges and is accepted by several establishments throughout the U.S. and the world. Just like real money, Bitcoin has been used to make nefarious purchases on the internet. There’s so much vagueness that surrounds Bitcoin, especially when it comes to creating laws that regulate the currency.
In one case, a man allegedly laundered $15,000 in Bitcoin to undercover agents that informed the man in advance that they intended on using the Bitcoins to buy stolen credit card numbers. However, the charges were dropped because the judge ruled that Bitcoin isn’t backed by a bank or government, making the currency “not tangible” because it can’t be deposited in a bank, invested in gold, or hidden under a mattress.
In many other cases, bitcoins are used to make anonymous purchases. This can require the purchaser and seller to meet in person to exchange cash. Once the cash is exchanged, the seller notifies the exchange service with a special code and the exchange in return sends the buyer a unique, 34 character alphanumeric code that can be used as proof of ownership of the designated number of bitcoins.
The Struggle to Understand Bitcoins
People have a hard time understanding this electronic currency. We want to put our hands on it. We want to see it. People have a hard time getting comfortable with using alphanumeric codes to prove ownership. Governments as well have a hard time with bitcoins because it is anonymous by nature and very difficult to track.
The anonymous nature of bitcoins make it the perfect currency for criminals. It is difficult, if not impossible, to figure out where it is coming from, who owns it, and what it is being used for. Recently, many people have gotten caught up in the bitcoin trading craze because the price of bitcoins has skyrocketed. Like most investments, if you got in early, you made a lot of money (at least in theory). Many people who were rich on paper, soon found there fortune had collapsed as the price of bitcoins plummeted without any warning. Sounds like the stock market.
Bitcoins are also commonly associated with the dark web. The dark web, which I will talk about in more detail in another blog, makes up approximately 90% of the internet, but most people don’t go there. Similar to bitcoins, the dark web is an anonymous place where people can buy and sell things that would otherwise be illegal in the real world. The dark web is like the wild west back in the 1880’s- virtually anything goes.
How Bitcoin Can Be Used in Money Laundering
When money is laundered, it involves moving illegally acquired money into legal channels in order to disguise its source. Drug smuggling is a crime that usually involves money laundering. The smugglers will take the money and channel it through legitimate business endeavors to make the money look like it is income from the business rather than income from drug smuggling. The paper trails can become very complex because of technology. Using Bitcoin in the equation can make the paper trail even more difficult to follow.
Dealing with Bitcoin-Related Criminal Charges
When a person is accused of money laundering or other crimes using bitcoins, the charges can exist at the state level, federal level, or both. It’s also possible to be charged with racketeering, which enhances the penalties if convicted. If you or a loved one has been accused of money laundering and/or other related crimes involving bitcoins and/or the dark web, it’s imperative to speak with a criminal defense attorney with experience in that specific area in both Minnesota state and federal courts. Call DeVore Criminal Defense at 651-435-6500 for a free consultation.
Posted 25th April 2018 by DeVore Criminal Defense