Title: How does Bitcoin Money Laundering work? -
Headings: How does Bitcoin Money Laundering work?
How does Bitcoin Money Laundering work?
Mechanism for Money Laundering
Need for Regulation
Prevention and Mitigation
Counter Arguments to Regulation
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Content: Since cryptocurrencies make it hard to regulate such transfers, they could attract lots of people who want to evade taxes in their respective countries. However, some startups like Chainalysis are actively trying to come up with solutions to track Bitcoin transactions as they are available for everyone to view on its public ledger. Need for Regulation
Bitcoins and other cryptocurrencies are decentralized so there is no central organization that is aware of all the transactions happening on its ledger. This makes it especially challenging for regulators to control. Essentially to control Bitcoins, an adversarial government would have to shut down the whole public internet. This is so because Bitcoin does not depend on central servers to function, but instead on its decentralized network of miners to process transactions. In its ten years of operation, no government has been able to regulate Bitcoin efficiently even though several attack vectors have been tried. This shows that Bitcoin can handle scale and is also very resilient to attacks on its network making it a haven for tax evaders. Prevention and Mitigation
Ever since Bitcoin first made headlines in 2013, regulators across the world have made numerous attempts to try to regulate Bitcoins. However, most of these regulators seem to not really understand the concept of Bitcoins and how these can be controlled.