Bitcoin Money Laundering Lands Six in Court
Six men are facing charges in the Netherlands after being accused of laundering hundreds of thousands of euros with the aid of the online cryptocurrency, Bitcoin. They allegedly laundered the money by reselling bitcoins paid for by illicit drug sales.
The men appeared in a Dutch court on Wednesday and are now facing a potential jail term ranging from 6 to 36 months, at the request of prosecutors, with their crimes relating to drug possession and money laundering.
Many researchers have stated over the past few months that, the growing occurrences of money laundering activities happening around the world can be attributed to the increase in the popularity as well as the use of Bitcoin and other online cryptocurrencies.
Many criminals have resorted to the use of Bitcoin for their dubious schemes including online gambling, tax evasion, and money laundering.
On Monday, during the opening day of the case in Rotterdam district court, the prosecution stated that all six men were accused in 2015 “of money laundering, having hard drugs and preparing for the export, production, and trade of hard drugs,” with all this part of an international probe.
Reports suggest that the accused allegedly met with traders who dealt in bitcoin in locations which had public access to Wi-Fi. They would then exchange their illegally acquired online currency on the dark web for hard cash.
The prosecution again said in a statement that, the bitcoin traders did not demand any form of identification neither did they inquire about where the bitcoins came from as they are âopposed to normal currency exchange shopsâ. This is due to the risks involved in dealing with currency exchange shops as well as the rate at which bitcoins are exchanged. The cost considerably is higher than the normal bitcoin transaction.
However, during the hearing on Wednesday, each of the men, appearing in turns, opposed the claims, insisting they legally obtained the bitcoins.
“My client is accused of having sold more than 460,000 euros (R7,6-million) in bitcoins which he supposedly earned through drug trafficking,” one lawyer Marielle van Essen told judges.
“We completely refute it,” she added.
Her client who was known only as Mr. Bischop then jumped in stating that: “I had a job, a good salary and no rent to pay. I acquired bitcoins in a completely legal way.”
Prosecutors afterward stated that the defense “was unable to explain the origins of the astronomical sum of money” earned by the accused, arguing strongly that money-laundering posed “a serious threat to our society.”
What makes bitcoin very attractive is because of the anonymity in transactions that its traders enjoy. Virtually no trails are left behind, making it very hard to trace them.
As Bitcoin continues to rise, so is the numerous cybercrimes revolving around it. Many criminals have taken advantage of it and through crafty ways, are stealing bitcoins or cash from victims.
Bitcoin scams are nothing new, but the new extent that it has reached is very concerning. Through numerous phishing schemes, people are now being manipulated into losing their bitcoins on a daily basis.
âDemands for at least $25 million are likely to increase because technological changes in virtual currencies are making it easier for criminals to move sums anonymouslyâ, one security company stated.
As many people find it difficult to engage in bitcoin transactions, either selling or buying the regular way, the issue has now even moved beyond the online realm. Now traders are meeting in person to make transactions. This the desperation involved in the bitcoin world.
Numerous scams and rip-offs have happened during these times with some even proving to be more dangerous than it actually seems.
Just recently in May of this year, a 28-year-old man from New York posted an advertisement on a bitcoin market platform, offering to sell Bitcoins worth $1,100 and soon got a response from an interested buyer. They then agreed to meet in Brooklyn for the exchange and when that happened, the victim even agreed to get in a vehicle to complete the deal.
He was then held at gunpoint upon entering the vehicle by the robber and his armed co-conspirators, forcing him to give up his cryptocurrency to their bitcoin wallet.
Also, a Florida software engineer, Yuri Lebedev, a 39-year-old man was recently jailed for his role in a scam that tricked banks into processing bitcoin transactions by disguising them as restaurant-delivery charges and online purchases of collectible items. He is now serving a sentence of 16 years.