Buying real estate with bit-coin, isn't that close to money laundering?
This was entirely legal, and I was Making My Own Financial Decisions™, but the route got shut down pretty quickly anyway.
If I am in a country from where I cannot legally buy a property in Dubai, would buying a property via BTC route be legal? Definitely not.
The only scenario in which it makes sense to buy property directly in BTC is if I had bought BTC years ago when it was cheap, it would be better to convert it into a real asset like an apartment in Burj Khalifa and convert my on paper wealth into real wealth.
Bitcoin or your blockchain of choice has no such issues though! You can prove to your seller that you have the funds, as well as even pre-commit the money in a smart contract, or a multi-sig transaction. Doing so would completely remove the need to wait on the slow and inefficient banks to do their thing.
Where are you getting that from? If the money has been earned in a legit manner and you want to spend it on a legitimate thing, who's stopping you from spending it?
Yes if your source of money isn't legal or you want to spend on something illegal, that's a different story.
A.) Transfer a part of it (for this particular bank, anything more than $5000) to pay a deposit for a house;
B.) Make a final settlement on a house, again with money I had available in my account.
There are limitations on how much you can transfer easily at once, and different kinds of approval and parties have to be involved to pay for something large.
When we bought this property, the least drawn-out bit of the overall process was the actual transferring of the funds. That was the easy part :)
It was the same with vehicles we've bought, the fastest part of the process was transferring the funds from buyer to seller, by far(!)
Are there (m)any significant transactions where the moving of money from buyer to seller is the bottleneck in terms of time and/or effort?
I spent an hour on the phone to get my limit temporarily raised, then another hour or so later in the day when the payment was flagged as suspicious and my account was locked. There was then an arbitrary waiting period of one day where the transfer sat in limbo before getting processed (more security theatre), and finally an additional two days for the funds to clear.
If I have the money and they are legal, I can spend them without anyone getting in the way.
Banks ask you the reason for transactions beyond a certain amount because they have to report it to authorities.
Large transactions like paying for a property don't happen at the drop of the hat. You won't just wake up in the middle of the night and decide to buy a property immediately right then.
How easy is it to actually buy 5M USD of bitcoin? Assuming you have legit money?
And why would you move legit money out of the banking system? Assume you have 5M USD in bitcoin, can you sell it and deposit that in your bank without lots of money laundering questions that are hard to answer?
My two cents is that if you have legit money, you will want to keep in the banking system, and avoid risks of being accused of money laundering.
I was going to say, "Can't be too hard; Musk does it with hundreds of millions" (billions?).
But then again, maybe it takes three assistants two days each time; he can afford that.
Cash is an infinitely better money laundering vehicle.
[1]: tools that blur the transaction chain, masking the origin of one's coins.
Somehow, you've got to do a billion dollars in cash to bitcoin transactions, but what's the point of buying middle eastern real estate with the bitcoin after that? Why not just rinse the bitcoin through a tumbler and sell it on an exchange and tell the taxation ministry that you simply made a great investment? Then you have a billion dollars minus tax in your bank account that you can do anything with. Dubai real estate is completely irrelevant to the process.
I think "money laundering" is like "ponzi scheme". The more likely someone on the internet is to use it, the less likely it is that they actually understand the term.
You could take your bitcoin and sell it on an exchange as you suggest but there are two problems with this. First, it's not that easy to sell a lot of bitcoin for real USD and the transaction costs can get high. Second, and more importantly, as money launder what you really want to do is take your dirty money in one jurisdiction and take it to another. Did you ever see Blow? Based on a true story. A US guy raised incredible money selling cocaine and stored it in a shady Panama Bank. The bank steals his money. What his recourse? If you are an oligarch in a corrupt country you want to get your money somewhere your government can't seize it. So why not take your bit coin and use it to buy real estate in Dubai? If you took your bitcoin and sold it in a way that ends up in a western bank, that bank is going to do kyc and defeats the whole purpose.
Obviously I have never laundered money and I don't really know. Tell me I am crazy.
Too risky for me, but if you're a drug cartel, that's business as usual.
Furthermore, when people bring up the laundering and crime argument, I always point out that the us dollar is by far the medium of choice for laundering money, crime, ransom, extortion, drug payments, human trafficking payments, terror financing.
Accepted almost everywhere, virtually untraceable.