Inside a $30 Million Cash-for-Bitcoin Laundering Ring In New York (404media.co) 34
404 Media (working with Court Watch) reports on a $30 Million cash-for-Bitcoin laundering ring operating in the heart of New York
For years, a gang operating in New York allegedly offered a cash-for-Bitcoin service that generated at least $30 million, with men standing on street corners with plastic shopping bags full of money, drive-by pickups, and hundreds of thousands of dollars laid out on tables, according to court records.
The records provide rare insight into an often unseen part of the criminal underworld: how hackers and drug traffickers convert their Bitcoin into cash outside of the online Bitcoin exchanges that ordinary people use. Rather than turning to sites like Coinbase, which often collaborate with and provide records to law enforcement if required, some criminals use underground, in-real-life Bitcoin exchanges like this gang which are allegedly criminal entities in their own right.
In a long spanning investigation by the FBI involving a confidential source and undercover agents, one member of the crew said "that at least some of his clients made money by selling drugs, that his wealthiest clients were hackers, and that he had made approximately $30 million over the prior three years through the exchange of cash for virtual currency," the court records read.
Thanks to user Slash_Account_Dot for sharing the news.
The records provide rare insight into an often unseen part of the criminal underworld: how hackers and drug traffickers convert their Bitcoin into cash outside of the online Bitcoin exchanges that ordinary people use. Rather than turning to sites like Coinbase, which often collaborate with and provide records to law enforcement if required, some criminals use underground, in-real-life Bitcoin exchanges like this gang which are allegedly criminal entities in their own right.
In a long spanning investigation by the FBI involving a confidential source and undercover agents, one member of the crew said "that at least some of his clients made money by selling drugs, that his wealthiest clients were hackers, and that he had made approximately $30 million over the prior three years through the exchange of cash for virtual currency," the court records read.
Thanks to user Slash_Account_Dot for sharing the news.
$30M? So small-time then? (Score:2)
That sounds like a lot, but given how much money-laundering and other criminal activities are done with crapcoins, that is really peanuts.
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6 guys at $10M/year means each guy is laundering about $5k/day.
Whether that is peanuts or gold macadamia nuts is beyond the simple math. Agreed it sounds small, though.
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It doesn't matter whether it's digital coins or strippers. In NYC it's just bound to happen.
https://www.youtube.com/watch?... [youtube.com]
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Always some asshole that has to push a political agenda...
Re: $30M? So small-time then? (Score:2)
Is there a logical error somewhere?
Re: $30M? So small-time then? (Score:3)
Lesson learned, use Monero instead?
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What, you read the article? We do not do that here on /.!
Looks like toy are right though, $30M did sound wayyy too low.
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That's what NFT was supposed to do. Too bad it was too dumb to serve that purpose.
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> When a man hands someone cash for a number, and later gives that number to someone else, no crime is committed.
What if that number is 09 F9 11 02 9D 74 E3 5B D8 41 56 C5 63 56 88 C0 ?
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What if one of those men is an American and the other is a financier for ISIS or Hamas or the North Korean nuclear program? That number can still be exchanged for cash after all. Bank transfers are just numbers too...
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What if someone gives a wad of cash to a hitman to kill his wife?
Re:The real scam (Score:4, Insightful)
There are a lot of practical limitations to cash transfers, distance being an obvious one. You'll notice that cash couldn't make ransomware practical but cryptocurrency did.
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https://www.law.cornell.edu/us... [cornell.edu]
None of the criteria for actually charging people with money laundering are what you claimed. (The two Internal Revenue Code sections cited are about tax evasion and tax fraud respectively.)
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That's my point, the government is only pissed because of the potential for lost skimming-off-the-top of a net-zero transaction.
It's like bartering with your neighbor, offering cattle for a tractor. You both owe the government tax on the fair market value of the goods you received. Next season if you trade back, you owe tax again.
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No, it's not. You've missed the entire point of anti-money-laundering and know-your-customer laws. The only connection they have with a "net-zero transaction" is that criminals will try to use a "net-zero transaction" to hide their money streams. That's what the government cares about here.
Or do you think that getting paid for commercial labor is also a "net-zero transaction" that the government has no legitimate interest in taxing?
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"What crime is committed if someone bought stolen property?"
You answered it yourself
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My sentence described exactly what it said. If you add context to make it illegal, I'd agree it's illegal. If I modified my claim to say "unless that number was the result of stealing property," then you could say "A-HA, I GOT YOU NOW! What if the credit card number was legally obtained, but the two men are actually in prison and therefore it's contraband? HA!"
Re:Private sale of property is illegal? (Score:4, Insightful)
Private sale of property is illegal?
Yes, in certain circumstances. It's not illegal to sell _your_ property, but if you engage in systematically reselling others' property, then you need to follow regulations. This is not at all different from pawn shops. You need to keep records, and you need to pay taxes.
Idiots (Score:2)
Bitcoin is a crime fighting tool (Score:2)
Criminals think they can get away with financial crimes through the use of the bitcoin network. It should be supported as an alternative payment network so law enforcement can find all of the criminals trying to break laws with it. Why not use it for a national currency?
Criminalizing the use of bitcoin will just drive criminals to use other options. It would be better to support bitcoin for widespread domestic adoption so the criminals cans be tracked.
This post contains exactly zero sarcasm. /s
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Criminalizing the use of bitcoin will just drive criminals to use other options
And why is that bad? I'm all for making criminal transactions have more friction.
It would be better to support bitcoin for widespread domestic adoption so the criminals cans be tracked.
LOL, no.
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And why is that bad? I'm all for making criminal transactions have more friction.
I'm not sure where you live, but my right as an American to communicate numbers over a network of interconnected computers is protected from the actions of overbearing government bureaucrats who would like to prevent me from using such methods of communication.
The government can use its tools to find bad guys doing bad things on the network (however it defines those things), but it can't prevent the use of the network for communicating numbers. At least, not legally.
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Small fry (Score:2)
Hiding information Crime (Score:2)
I realize the government has made it a crime to hide information from it, but that sort of thing has always made me scratch my head.
Do we really want the government to have the power to discover all the information it asks for?