Laundering money through bitcoin is a bad idea—not only because it’s illegal, but also because it leaves a permanent trail. Chainalysis Senior Economist likened it to pulling off a jewelry heist, but leaving a map to your apartment at the scene of the crime.
What cryptocurrencies save in time (versus say, buying and selling bars of gold) they lose in efficacy. When it comes to financial crime, the vast majority of cryptocurrencies, including bitcoin and ether, are blunt instruments. “The goal of money laundering is to create a chain of transactions that can’t be traced, so since the bitcoin blockchain is designed to have an indelible public record of all transactions, it makes ‘laundering’ much more difficult,” Dave Weisberger, CEO of CoinRoutes, a crypto order-routing service, said. “The technology from [blockchain analytics] firms such as Elliptic and Chainanalysis is sophisticated as well. They can trace [wallet] addresses quite well, which also make law enforcement easier.”