I am not talking about intra country flows though but specifically kleptocrats laundering dark money in the west.
You can't have any way of knowing how much money in crypto is dark.
And of course economies of some of those dictatorships are smaller than some US companies, but if you are telling us that it doesn't matter if putin and friends can launder money through crypto to maintain power, kill more people and make us suffer while buying cozy life for themselves because that amount of money is not that large in the grand scale of US economy then good for you, I have nothing else to say.
They don't need bitcoin for that. Smuggling money into the US (the by far largest global destination for laundered money) via crypto requires the exact same amount of criminal effort (false identities, mules,..) as smuggling money through regular bank transfers, because nowadays all crypto exchanges that are allowed to interact with US banks must establish the identity of their customers same as a regular bank.
So that leaves P2P trades. Their volume can be estimated (in fact: upper bounded, by adding all trades on the block chain and subtracting those corresponding to trades on known centralized exchanges.) It's about $200B per year.
As for money laundering, the range of estimates of global volume per year is pretty wide, ranging from $20B to $5T. If you compare research from the 90s and today, you'll notice that the estimates have not changed, meaning: similar methodology applied to current data will yield estimates that are close to the estimates from the 1990s, adjusted for inflation.
If the low end estimates are true, then money laundering is not a serious problem and using it as pretext for destroying civil rights is a joke, so let's go with the UN's reasonably big estimate: $800 billion - $2 trillion.
In that case, even if *ALL* P2P bitcoin trades were criminal, they would still only amount to 10%-20% of global money laundering.
Finally: The total BTC market cap is ~$400B, half of that has not been traded since 2015. Given the risk affinity of career criminal and the inherent volatility of criminal enterprise and given the historical rise of BTC, don't you think at least 10% of mone launderers would keep at least 10% of their money laundering transactions as crypto instead of cashing all of it out into USD? But they wouldn't keep them on exchanges. Looking at the blockchain data, it's difficult to make that work *UNLESS* only a small amount (less than $100B) money laundering happens via crypto.
> all crypto exchanges that are allowed to interact with US banks must establish the identity of their customers same as a regular bank
And that is good of course that some countries do it, doesn't prevent all scenarios but it makes some difficult.
> P2P trades. Their volume can be estimated
How exactly do you measure what is what on crypto with mixers and anonymous currencies?
> a small amount (less than $100B) money laundering happens via crypto.
You mean via Bitcoin? You know there are other coins.
>How exactly do you measure what is what on crypto with mixers and anonymous currencies?
you add up all the transactions on the blockchain and subtract all the transactions connected to wallets of centralized exchanges.
>you mean via Bitcoin? You know there are other coins.
"god of the gaps."
tl;dr: you originally claimed there is nothing we can know (and that therefore we should assume without evidence that money laundering via crypto is a huge problem). but there are a few things we can know.
How do you figure which transactions are connected to wallets of centralized exchange with mixers and anonymous currencies?
> UN
Does UN have a crypto savvy anti laundering force to produce accurate estimates or they just pull numbers out of their backside?