Bitcoin Dutch Police Arrests Three People in Bitcoin Money Laundering Investigation
Jp Buntinx · @http://twitter.com/jdebunt | Oct 01, 2015 | 05:22
A total of six people has been arrested during police raids yesterday, which took place in The Netherlands and beyond. These police raids are a result of an ongoing investigation regarding money laundering with Bitcoin, a service offered by several individual residing in the Rotterdam area. Bitcoin’s PR problem has gotten slightly worse yet again by the look of things.
Also read: Bitcoin Criminals Target Australian Financial Sector
Guaranteeing Total Anonymity While Exchanging Bitcoin
It is not the first time Bitcoin is linked to money laundering activities. However, this police investigation focuses on several individuals offering a guaranteed anonymous exchange from fiat currency to Bitcoin. This type of business is deemed illegal under Dutch national law, and it was only a matter of time until the operation was shut down.
The individuals offering this service would accept large amounts of Bitcoins in exchange for fiat currency, all the while charging a higher commission rate. Doing so enables money laundering of stolen or illegal fiat currency into Bitcoin, which will affect the Dutch economy in the long run. Customers who received the fiat currency would own illegally obtained funds, causing all kinds of legal trouble.
According to preliminary reports, these individuals have been able to launder a few million EUR through Bitcoin. All of the bank accounts and Bitcoin wallets used during the operation of this business have been frozen by the authorities. A total of three residents of The Netherlands have been arrested during the police raid, and they will be arraigned as early as tomorrow.
Police officials also confiscated various computers, drugs, weapons and any type of administrative files that could help build the case against these criminals. The three Dutch people arrested are 19, 20 and 23 years old respectively, all of whom live in the Rotterdam area. On an international level, one 24-year old man was arrested, whom will be extradited from Malta. The other arrest took place in Latvia, and police officials are questioning this person right now.
It will take some time to fully construct the flow of money going in and out of Bitcoin through the hands of these individuals. Not all of the money sources have been unraveled just yet, nor is it clear how this team of criminals managed to get their hands on such large amounts of Bitcoin. More details will be revealed as the investigation progresses.
Bitcoin Is Not Viable For Illegal Activities
If there is one thing the history of Bitcoin has shown us, it is that virtual currency is not a viable tool for illegal activities. Despite Bitcoin’s association with various illegal marketplaces and less-than-legal business deals, all of these schemes have come to an abrupt halt sooner or later. The reason for this is simple: Bitcoin is not an anonymous form of money, as every transaction can be publicly tracked through the blockchain.
This story will have a slightly negative impact on the Bitcoin ecosystem, as mainstream media will continue to feast on anything that puts virtual currency in a negative spotlight. However, it is exactly these mainstream media outlets who are not telling the entire story, as the major culprit isn’t Bitcoin, but fiat currency.
Bitcoin is perfectly traceable and a far cry from anonymous. Fiat currency, on the other hand, is the most anonymous form of money that has ever existed. There is no way to trace paper money or coins at any given time, and fiat currency has been part of drugs, gambling, prostitution or any other illegal activity since the day it was created.
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Source: Openbaar Ministerie Nederland (Dutch)
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