Anyone who believes that cryptocurrencies are the perfect cover for money laundering will be disappointed. If there is one thing that is legally regulated and monitored worldwide, it is our cash flows. Tax would like its fair share of our income. And the money gained through illegal practices must not escape under the radar. You can therefore assume that authorities have ensured that senders and recipients of money can always be traced. And the same goes for virtual money.
No coverage for illegal activities
Perform a ransomware attack and get the victim to pay a large ransom in the form of bitcoins? A plan called to fail. It was also the experience of the hackers who go by the name ‘Darkside’. In May 2021, they carried out a ransomware attack on the US colonial pipeline. They managed to shut down four large oil pipelines for a few days. The blockade could only be lifted if the oil company paid a ransom of five million dollars in cryptocurrencies.
The company did, and it looked like Darkside’s members could rest on their laurels for now. They had not counted on the diligence of either the Colonial Pipeline or the national investigative authorities. The Colonial Pipeline immediately reported the attack, allowing the FBI to launch an investigation immediately. One and a half months later, the FBI managed to recover $ 2.3 million. It was not even necessary to know the exact identity of the perpetrators. All the FBI needed was the address of the purse to be able to seize it.
Ben Weiss is the CEO of CoinFlip, an ATM provider for cryptocurrencies. In fact, according to him, it would be downright stupid to use cryptocurrencies for illegal transactions. Cryptocurrency trading is even more transparent than regular payment methods. A physical note is much harder to track unless you register the serial numbers in advance. Moreover, having a pseudonym from anonymity is very different. The activities you perform with your purse are visible to everyone. And if you put several suspicious activities together, you quite easily come up with an identifiable person.
All transactions are registered in the so-called general ledger. This ledger or database can be viewed by anyone. You only see the pseudonym of the person who made the transaction. But a lot of information can be retrieved from time, frequency and quantity. If you know that Klaas transferred an amount in bitcoin to Company B on June 24, the picture is quickly finished.
Before you can trade bitcoins or other cryptocurrencies, you must first buy them. And when you bought your bitcoins, you should no doubt submit a copy of your passport or proof of identity. This information can also simply be requested by authorities who, for example, want to investigate a suspicion of money laundering.
How can you remain completely anonymous on the Internet? Complete online anonymity can never be guaranteed. For the purpose of investigating criminal offenses, that’s a good thing. No one wants criminals to be able to strike anonymously and without restrictions. But how far can privacy breaches go if you have no intention of engaging in illegal practice at all? To keep unwanted viewers and unnecessary followers away, it is best to enable a VPN. With the NordVPN coupon, for example, you can temporarily sign up for a VPN subscription very cheaply.
Are you particularly interested in how to trade cryptocurrencies as anonymously as possible? One way is to mine them yourself. This is only lucrative if the proceeds more than pay your electricity bill back. You can also exchange cash for bitcoins in a Bitcoin ATM. The downsides are that you have to go to the ATM with a large sum of money in your pocket and that you pay an average of 7.5% transaction costs. Finally, you could deviate from, for example, Monero, Dash and Zcash.