BONOKOSKI: RCMP attack money launderers


Cryptoassets Are Increasingly Used to Launder the Proceeds of Crime

Content of the article

Three years ago, the Trudeau Liberals introduced groundbreaking regulations on bitcoin resellers out of legitimate fear that pseudocurrency might attract money launderers.


Content of the article

“More and more cryptoassets are being used to launder the proceeds of crime,” then Finance Minister Bill Morneau said during the 2018 Senate Banking Committee hearings.

Unbeknownst to those lawmakers, however, the RCMP had already been a year into a four-year sting operation of bitcoin dealers who, using the Darknet as a digital connection, were doing precisely what Morneau was talking about.

Darknet, by abbreviated definition, is a restricted access underground computer network that is primarily used for illegal peer-to-peer file sharing.

“(In fact,) investigators continue to analyze the large amount of financial documents,” said the RCMP corporal. Neil Vaid of the International Investigations Unit wrote in an affidavit filed in the Ontario Superior Court.


Content of the article

The documents in that affidavit, as first reported in Blacklock’s Reporter, detailed an elaborate investigation in which RCMP officers posing as bitcoin buyers purported to launder the proceeds of crime to track down the perpetrators.

In a wiretap conversation with a bitcoin dealer, an undercover cop asked, “Look man, do you even care where some of the money comes from?” “

“I’m pretty sure you have an idea that part of this isn’t exactly clean and I want to know if that’s a problem,” the undercover cop continued.

“We don’t care where the coins come from,” replied the bitcoin dealer. “No one can tell anyway.”

The criminal investigation was sparked by 2017 advice from the Internal Revenue Service and tax auditors “on drug trafficking using bitcoin and darknet,” according to the court’s affidavit.


Content of the article

Canada-based drug traffickers using pseudonyms like Pharmacy Phil and Pharmacy Powder appeared to sell “amounts of fentanyl and crystal meth” in exchange for bitcoin.

Mounted Police documented “suspicious transactions by people who were subsequently identified by the RCMP as drug traffickers” and at one point an undercover agent posing as an “importer and exporter” met a bitcoin merchant in the parking lot of an Ottawa restaurant to exchange $ 20,000 in cash.

The RCMP affidavit, according to Blacklock, quoted a bitcoin merchant as saying, “Sometimes what we do is we have a lot of customers who will come in every day for five days and collect $ 9,000 a day.

Such transactions, of course, were $ 1,000 less than $ 10,000, which raises red flags in the financial industry.


Content of the article

As noted in the National Law Review, bitcoin transactions actually have the ability to facilitate money laundering for criminals, as cryptocurrencies are made, transferred, and stored online and allow cybercriminals to move their funds instantly. across borders.

We apologize, but this video failed to load.

Laundering cryptocurrencies through online exchanges and then converting them to cash is much easier than laundering bags full of cash often across borders. Online transactions know no borders and eliminate the need to physically move illegal money from one place to another.

Ergo is easy and convenient.

Not only that, there is a certain degree of anonymity associated with bitcoin transactions. While not 100% anonymous, these transactions are in fact pseudonymous, which means that the public bitcoin addresses used for transactions are not recorded on behalf of individuals.

If there has ever been a system designed for crypto-bandits, it is bitcoin.

Transactions are stored publicly on the blockchain – the decentralized ledger where all bitcoin transactions are stored – but only the person making the transaction has access to the account wallet.

Federal agencies, the National Law Review said, will therefore find it difficult to tie a particular bitcoin transaction to an individual,

But, as the RCMP has shown, it is possible.

It just takes time and deep data dives.

[email protected]



Postmedia is committed to maintaining a lively but civil discussion forum and encourages all readers to share their views on our articles. Comments may take up to an hour of moderation before appearing on the site. We ask that you keep your comments relevant and respectful. We have enabled email notifications. You will now receive an email if you receive a reply to your comment, if there is an update to a comment thread that you follow, or if a user that you follow comments. Visit our Community rules for more information and details on how to adjust your E-mail The settings.

Source link


About Author

Leave A Reply