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Comment by CaptainOfCoit | Hacker News Reader

> I'd imagine it's pretty easy, too. You've already got the assets in a poorly-accountable and liquid state

Alright, so walk me through it because I don't see how it's easier to wash than other ill-gained funds like cash.

You robbed someone and now you sit on $200M worth of Bitcoin. How you unload them so you have cash you can use, when every transaction is traceable and any exchange willing to trade for those amounts do KYC and follows AML?

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any exchange willing to trade for those amounts do KYC and follows AML

This is not true AFAIK and it used to really be not true. There were plenty of no-KYC exchanges or exchanges that offered no-KYC accounts if you had the right connections.

> This is not true AFAIK

Tell me one big exchange that'll accept a deposit of $200M USD worth of cryptocurrency without asking questions.

> exchanges that offered no-KYC accounts if you had the right connections

Yeah, and plenty of taxmen that will let you wash money if you pay them X amount, but lets try to stick to verifiable facts instead of imagining/assuming a bunch of things.

with clean funds launch a new token and create a liquidity pool on uniswap

with another set of clean funds in a second address you buy that token in the liquidity pool

with the dirty funds in the third address you also buy the token and dont stop buying, you use all the dirty funds

the second address sells, and you just are another lucky crypto trader with another 10,000% gain, indistinguishable from any other crypto that’s mooned that much. You, along with all the bots and copy traders and momentum buyers. Just sell into liquidity, withdraw the more liquid crypto on exchanges. Pay taxes.

If you do this, the dirty funds need to connect to a different RPC server than your clean funds

dont use infura or a node in a data center on the same IP address

if youre not using your own node on your own network, you need to mask your IP address and think about who knows it. Tor works better than VPN for this

If you think modern chain analysis can't look through those simple schemes, I'm happy the ecosystem seems more naive than I thought :)

Oh well, easier for criminals to get caught I suppose, so not much harm done.

All the indictments I’ve seen involve basically zero OPSEC while all the others go unindicted

Its not about the chain analysis, its about proof. Any random charting site will raise flags about the token buyers, but can the prosecutor use that? The cases arent being brought

You run the bitcoin through mixers/online exchanges into monero/zerocoin and then to wherever to get out with fiat.

you still have to do the actual laundering at some point. just because you have $200 million now in monero (which you also need to get to first) doesn't mean you can just transfer them to your bank account. exchanges will KYC you for that, and you will definitely get flagged for a source of wealth / source of funds check to prove where you got it from

For $200m yes, but you’d be really stupid trying to do it all at once. Small amounts, multiple accounts, gradually over time.

It's really easy. Use casinos in 3rd world countries to certify your money as gambling winnings. There must be underground network for this. So it looks like you're gambling and you got lucky. Very dangerous though. I heard that they charge 13% total fee. You come in at 5M$. You play for 1 week.. Leave with 160M or something. Bring that cash into the bank and deposit it.

How to turn monero or Bitcoin into cash, I think is the hardest part.

Laundering it after that is, in fact, easier.

But the first problem still isn't solved with your statement I think.

Aren’t you supposed to show proofs of winning 160m when depositing into a bank? Even for just a few millions?

And a shady third world casino will happily provide that proof document in return for a 13% cut of your winnings.

I still think you’d get under an investigation (at least from the tax authorities, but I can imagine police too) after years of years consistently depositing millions of wins in your bank account.

I do not think shady people put their loot in bank. Most illicit activities and tax avoiding folks rely heavily on cash or other expensive exchangeable goods(rolex/jewellery/gems/gold bars/gold watches etc).

> any exchange willing to trade for those amounts do KYC and follows AML?

Binance paid U.S. regulators a $4.3 billion for violating U.S. anti-money laundering laws a year ago. There are many crypto exchanges that have poor KYC or deliberately do it in a way that can be circumvented - Bitzlato was one example. I imagine if you have some dirty Bitcoin you can find an exchange today running in a non extraditable jurisdiction that will trade it for cash for cut.

https://www.reuters.com/technology/co-founder-seized-crypto-...

It's easier because mainstream cryptocurrency services support money laundering for privacy reasons, and will happily process withdrawals from known money laundering services like Tornado Cash until OFAC orders them to stop. Even if you trust that they're doing an honest inquiry into the source of large amounts - and I do not - they can't know that an arbitrary mixer output didn't come from casino winnings or Ethereum mining in the early days.

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