Bitcoin and other cryptocurrencies are often in the headlines, especially when their value is rapidly increasing. The price of a single bitcoin has risen to little over £10,000.
It’s a strange ‘currency,’ because it’s not supported by any government, and it’s certainly not backed by a gold stock.
It is, in fact, nothing more than a virtual object whose value is determined completely by supply and demand — one of the few similarities it has to traditional cash.
So, what’s the allure, why would someone want to exchange £10,000 for one bitcoin, or a smaller sum for a part of one?
One of the most appealing aspects of bitcoin is that it can be used across borders, outside of traditional financial rules, and with complete anonymity.
Those three magical characteristics make this sort of currency appealing to criminals looking to launder their money.
Nobody cares about the trader’s identity, the proceeds can be cashed practically anywhere in the globe (there are even cash ATMs in several countries, including England), and law enforcement is powerless in this brave new world of international money thanks to Blockchain encryption.
This explains a 13-fold increase in value in just one year, compared to the end of 2016.
However, the higher the funds to be laundered, the more complicated and hazardous the initial transactions become.
That’s when the middleman steps in, either deliberately or unknowingly consenting to buy bitcoin or, more typically, move funds on behalf of a money launderer in exchange for a fee.
The cost could be as small as a few hundred pounds, but when expanded, it becomes significant. These people are known as’money mules.’
The government is eager to regulate these new currencies, as the treasury minister recently stated in a declaration to parliament:
“The UK Government is currently negotiating amendments to the 4th Anti-Money Laundering Directive that will bring virtual currency exchange platforms and custodian wallet providers into Anti-Money Laundering and Counter-Terrorist Financing regulation, which will result in these firms’ activities being overseen by national competent authorities for these areas. The Government supports the intention behind these amendments. We expect these negotiations to conclude at EU level in late 2017/early 2018.”
People will be able to assist in the laundering of cash until these safeguards are in place, with nothing that the authorities can do to stop it.
Cifas, the fraud prevention organisation, discovered over 8652’money mule’ incidents in the first nine months of 2017, which may sound like science fiction. This illegality is only the tip of the iceberg when it comes to money laundering.
If detected, the penalty might be severe, with a court authorised to impose terms of up to 14 years in prison.
If someone you know appears to have made a lot of money, you should start asking questions before it’s too late. More information is available on the following government website:
When a person is unintentionally involved in money laundering, it’s vital to take a step back and look at the situation with the benefit of hindsight to understand what really happened. Any defences accessible to someone suspected of money laundering offences will be revealed by a thorough forensic examination of the circumstances. Making a blunder is not yet considered a crime.
How can we help?
We ensure we keep up to date with any changes in legislation and case law so that we are always best placed to advise you properly. If you would like to discuss any aspect of your case, please contact our team of criminal defence specialists on: 01376 511819