Several regulators in the crypto space fear that digital currencies will be used to launder money. After cases like these, we can understand why.
Money Laundering Is a Serious Crime
Bestmixer.io in Europe has been seized by officials, who claim that the company was “washing” over $200 million in cryptocurrency funds and putting them into new, more legitimate accounts. This is the very definition of money laundering, and it doesn’t place crypto or corresponding businesses in a great light.
The money was seized by Europol, Luxembourg authorities and the Dutch Fiscal Information and Investigation Service (FIOD), all of whom agree that the funds were “tainted.” A raid was performed on the company on Wednesday, which resulted in its near-immediate shutdown and seizure.
Bestmixer.io was launched in May of last year and has been around for approximately 12 months. Police began an investigation into the company just a month after it opened its doors for business. During this time, the company – which was marketed as the “world’s leading cryptocurrency mixing service” – was discovered to be laundering most of its investors’ money, which ultimately came from illicit or illegal activities.
Among the services offered by Bestmixer.io was mixing assorted bitcoin (BTC) funds with those of Litecoin (LTC) and bitcoin cash (BCH). By taking “tainted” funds and mixing them with clean or honest funds, one can find that the illegality behind such coins can, for the most part, disappear or go unnoticed by federal authorities, which is what the company was potentially trying to do. The process, known as “washing,” involves getting rid of or hiding all criminal ties to a specific currency.
John Fokker – head of cybersecurity investigations at McAfee – led a team that assisted in the investigation. He claims that the cryptocurrency amounts were “sliced up” into several smaller transactions, which allowed them to stay easily hidden amongst the cleaner funds.
Mixing bitcoin that are obtained legally is not a crime, but other than the mathematical exercise, there’s no real benefit to it. The legality changes when a mixing service advertises itself as a successful method to avoid anti-money laundering policies via anonymity. This is actively offering a money laundering service.
Is All the Evidence There?
Europol also released a statement of its own, explaining:
The investigation so far into this case has shown that many of the mixed cryptocurrencies on Bestmixer.io had a criminal origin or destination. In these cases, the mixer was probably used to conceal and launder criminal flows of money.
Several servers were seized in the Netherlands, which offer IP addresses, bitcoin wallet addresses, transaction details and chat message logs for authorities to analyze. The FIOD and Europol have expressed an interest in sharing their findings with other countries to better understand the breadth of the crimes.