Bloomberg, Coinsource Report Indicates Bitcoin ATMs Are Money Laundering Vehicles

Bloomberg recently released a comprehensive report about how bitcoin ATMs are being used for the purpose of money laundering activities.

In this report, it highlights just how easy it is to buy bitcoin without even presenting the required means of identification as mandated by the law.

In fact, the report indicted many of these bitcoin ATM (BTM) outlets on their sometimes flagrant disregard for a tighter identity requirement, stating that they may be at risk of collusion in money laundering schemes.

The report which was carried out by an investigative journalist and Arnold Spencer, an ex-federal prosecutor, showed just how easy it was for him to walk into any bitcoin ATM outlet, and pay up as much as $14,000 for bitcoin transactions.

Spencer, who is currently hired by one of the leading bitcoin ATM companies, Coinsource, demonstrated this to show just how lax competing bitcoin ATM providers are about tighter money control and preventing the use of their machines for money laundering purposes.

The report states that because of the ease of exchanging cash for bitcoins, more illegal elements, mostly in the form of drug cartels, are cleaning their monies through these machines and are getting away with it –largely due to the ease of using fake IDs.

This puts many of these BTMs in clear violation of the U.S banking and anti-money laundering (AML) laws.

While the goal may have been to prove that his employer’s BTM has tighter anti-money laundering measures, the ease with which he was able to buy bitcoins with a fake Frank Sinatra ID in Plano, a suburb of Texas, shows how easy it is for anyone to do the same.

This exposé highlights how easy it is for just about any illegal entity to freely launder money to the tune of tens of thousands daily without reporting it to the Treasury department.

But Are These Claims Of Easy Money Laundering True?

In a swift backlash countering the report, individuals in the crypto community have been quick to point out that these claims by Spencer and Bloomberg are missing a key ingredient: the fact that money laundering with bitcoin is fraught with huge risks.

This is coming on the heels of the revelation that law enforcement agencies now have a way to track and connect bitcoin public addresses and transactions to real world identities and individuals.

So, bitcoin’s purported anonymity may not be as airtight as previously thought. While bitcoin may have been thought of as untraceable in the past, new developments have suggested that’s not the case anymore.

Then there’s the issue of bitcoin ATMs having built-in cameras, as well as the convenient stores around, also having their independent cameras.

What this implies is that law enforcers can actually catch criminals if they want to by requesting these cameras –a reality that completely negates the notion of privacy and anonymity– and using them to trace specific transactions to individuals.

All they have to do is look for people who used fake IDs –usually implies they have something to hide- run their faces through their face recognition databases, and voila, they have their culprits.


Of course, it’s possible that these cameras can be avoided with a little out of the box thinking. More importantly, it is possible that there is some merit to the Bloomberg report about bitcoin ATMs playing a role in global money laundering.

However, it doesn’t address traditional money laundering schemes that have generated about $2.5 trillion annually. Or the fact that at its peak, the entire crypto sector was worth $800 billion, and has since dropped to less than $150 billion.

With figures like this, it is very clear that even if bitcoin ATMs are being used for money laundering, the reality is that it is probably a drop in the ocean, and will continue to be for a long time.

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