10 People Arrested In the Netherlands For Bitcoin Laundering (reuters.com)

New submitter Incadenza writes: 10 people were arrested in the Netherlands today according to the Public Prosecution Service (In Dutch). The arrests were said to be part of an international investigation, including requests from the USA, Morocco, Australia and Lithuania. Apparently the investigators followed the trace from 'Bitcoin-cashers' (who convert the Bitcoin profits to old money) back to Bitcoin transactions on the Dark Web. How successful this was is yet to be seen, since all the main suspects are said to be 'cashers', not traders.

Comments

Re: There's a reason Republicans...

[Anonymous Coward]

It's not controlled by a central authority.

It's allowed to exist at the pleasure of the central authority. Control to be exerted as/when necessary.

Blockchain / Public ledger

[DrYak]

Or in other words: it might not be the best idea, for your illegal activities, to use a cryptocurrency: a type of money send/receive/exchange mecanism where...
THE WHOLE MECANISM (by design) RELIES ON BROADCASTING EVERY SINGLE TRANSACTION TO THE NETWORK
(specially when your adversary is the state and could put the necessary Big Data Analysis to more or less track the money through the network)

The main advantage of bitcoin and other crypto currency protocol, is that there isn't a single entity in charge of the transactions, there's not a single point that you can block/ban.
Everything works by the network reaching a consensus.
To reach consensus, it means that every member of the network keeps a local copy of the blockchain: a local copy copy of the global "ledger".
And thus each single transaction is broadcast to the whole network to be appended (= mining) to this globally distributed ledger.
Thus each time some pothead buys weed with BTCs, that mean that every single member on the network is informed that $price BTCs were moved from the temporary wallet of the pothead generated for this transaction, to the temporary wallet of the seller generated for this transaction.

And thus an entity with enough computing ressources can track all the temporary wallets generated in all the various transaction, and after following a big enough bunch of such "crypto-money trails" (so they have enough confidence), they can zero down to a few suspect that they can investigate through regular police work.

And so the seller CAN'T COMMIT TAX FRAUD
(Lie about the money he earns, and pretend to earn less to escape from paying the taxes they are supposed to)
Which is illegal in most jurisdiction.

So the Dutch equivalent of the IRS got on their trail.

Yup, the tax service are typically the kind of state-level player that might shell out for the necessary resources to track the money.
Lying about your taxes is illegal nearly everywhere.

They also found out some where producing XTC as well.

Which, from what I know, is on the *hard drugs* list in the Netherland (like heroin, etc.) and thus still outright illegal.

Unlike the *light drugs* list (like various THC-containing Canabis derivatives, and like the last few mushroom which didn't get banned yet in 2008) which are considered a private affair for the consumer (it's their health, therefor it's their problem) and tolerated for selling within reasonable controller manner
(a small coffee shop selling a couple of joints per client ? Tolerated.
a huge operation exporting 2 tons of hashish per year on various illegal networks? Busted).

Some dutch /.er to step in to correct me ?