“Blockchain for criminals” is actually a bad idea: unlike the banking system or cash, it is transparent, and using it for money laundering could easily get you an FBI on your tail.
Yesterday the US authorities arrested a married couple on charges of conspiracy to launder the proceeds of 119,754 Bitcoin that were stolen from Bitfinex, a crypto exchange, in 2016 👨💻
At the time, the stolen funds were worth around $71M, but have since soared to a whopping amount of over $5.2 Bn.
🕵️♀️ Approximately 25,000 of these bitcoins (worth $1Bn at the current rates) were transferred via a complicated money laundering process that ended with some of them being deposited into financial accounts controlled by two New-Yorkers: Ilya Lichtenstein and Heather Morgan.
The remainder of the stolen funds (over 94,000 bitcoins, or $4.1Bn) remained on the addresses used by the hacker, and while searching the couple’s online accounts, FBI retrieved the private keys allowing to access the funds.
This is good news not only for justice, but also for the crypto industry. FBI showed (once again) that law enforcement can use the blockchain to follow money laundering trace, despite all the techniques the accused resorted to:
➡️ using fictitious identities to set up online accounts;
➡️ utilizing bots to automate transactions;
➡️ depositing the stolen funds into accounts at a variety of crypto exchanges and darknet markets and then withdrawing them;
➡️ converting bitcoins to other crypto, including anonymity-enhanced coins;
➡️ using US-based business accounts to legitimize their banking activity.
Even the most sophisticated schemes could be untangled when the ledger they are executed on is transparent.
Can we shake off the “criminal” stigma yet?