The search for the true identity of Bitcoin creator Mr. Satoshi Nakamoto is discussed by “Will the Real Satoshi Nakamoto Please Stand Up” and at a video:
Mt. Gox which was once the world’s largest Bitcoin currency exchange, is also in the news. It made bankruptcy filings in Japan and the U.S. and reportedly lost virtual currency valued at $473 million.
Perhaps most important, is that Bitcoin and other virtual currency can be a major money laundering threat. This is true because with anonymity, determined criminals may exchange their illicit monies for virtual currency. As a USA Today editorial explains “drug dealers, tax cheats, money launderers and terrorists do have uses for such a currency. Bitcoin gives them a way to try to hide money or move it to places undetected.”
Moreover, a criminal’s hidden money would presumably be even harder to detect if that criminal used virtual currency like Bitcoin along with the kind of virtual office and internet bank mentioned at Wyomingcorporations.us.
I. SUSPECTED BITCOIN LAUNDERING
The January 24, 2014 criminal complaint filed in USA. v. Faiella, et. al. U.S. District Court, S.D.N.Y. Docket No. 1:14-mj-00164, reveals how conventional money could conceivably be washed via a Bitcoin exchange. The complaint alleges that Mr. Charlie Shrem and Mr. Robert M. Faiella participated in a scheme to sell over $1 million in Bitcoins in connection with the Silk Road website. The complaint claimed that Mr. Shrem and Mr. Faiella had operated an unlicensed money transmitting business; and had allegedly conspired to commit money laundering.
According to the complaint, Mr. Shrem also supposedly failed to file suspicious activity reports. The complaint states that Bitcoin is a virtual currency existing solely on the Internet. Bitcoin has no physical presence and it is generated and controlled by “computer software operating on a decentralized, ‘peer-to-peer’ network.” The complaint too indicates that individuals purchase Bitcoin with conventional currency by paying a Bitcoin ‘exchanger’ who operates on a commission.
The exchanger then sends the Bitcoins to the individual’s “Bitcoin ‘address,’ analogous to a bank account number…” Individuals who own Bitcoins can conduct transactions amongst themselves by “transferring Bitcoins to their Bitcoin addresses, via the Internet.” The complaint also states that “[n]o identifying information about the payor or payee is transmitted in a Bitcoin transaction.”
II. A BROAD RANGE Of CRIMES
As highlighted by the June 13, 2013 remarks of the Director of U.S. Treasury’s FinCen, virtual currency has had a role in a broad range of crimes such as “credit card fraud, identity theft, investment fraud, computer hacking, narcotics trafficking, and…child pornography.
Egmont Group Case No. 06075 for example, describes criminal suspects using virtual currency to purchase stolen credit card and bank account information. The criminal suspects made part of their illicit purchase with E-gold virtual currency, which was a predecessor to Bitcoin:
Case No. 06075: Courtesy of The Egmont Group of Financial Intelligence Units
Copyright 2014 Fred L. Abrams