News
Loosely Managed Digital Currency Could Be Avenue for Crime That’s Hard to Block
By Colby Adams
printAn emerging virtual currency intended to be used in lieu of cash could also be a vehicle for criminals seeking to make international transactions anonymously, according to investigators. Bitcoin, a loosely organized electronic payment system created in January 2009 by an otherwise anonymous computer programmer known by the possible pseudonym of Satoshi Nakamoto, allows users and merchants to make transactions through digital coins, with or without the aid of payment processors or other financial institutions. While the project remains relatively small, it has already drawn enthusiastic users, including international vendors and nonprofit organizations like the Electronic Frontier Foundation, which accept...
TO READ THE FULL STORY
Related News
Steep fines against banks that fail to prevent money laundering are complicating efforts by investigators to suss out cybercrime, a top London police official said Wednesday.
EU lawmakers should extend anti-money laundering requirements to some businesses that use or exchange virtual currencies, according to the economic bloc's law enforcement agency.
Love or hate New Yorks plans to shield Bitcoin and its competitors from financial crooks, one thing is certain: the proposal is only the first of dozens that will shape the industry.
British officials will soon review the promises and risks of alternative payment systems, including virtual currencies, as part of a broad initiative to promote advances in financial technology.
More than a year into an effort by the digital currency industry to convince critics that its promise doesn't extend to criminals more than consumers, Bitcoin proponents are questioning whether they have the right messenger to deliver their message.
Governments will need to bolster their countermeasures to battle fast-growing threats of fraud in the electronic money market, experts warned Friday.
For all of the legitimate concerns and overheated rhetoric about the rise of crypto-currencies, the biggest problem for Bitcoin may be one seldom discussed by critics: its abuse by tax dodgers.
With greater regulatory clarity, U.S. banks would embrace the digital currency companies they currently turn away due to compliance concerns, Bitcoin investors told New York State regulatory officials Tuesday.
Nearly all digital coins studied by researchers at the University of California in San Diego were used to purchase goods from a black market Web site selling illicit goods, a recent study found.
The second installation of a two-part story on how the Bitcoin market is changing under the scrutiny of federal and state officials.
Even as the use of Bitcoin grows, the differences in opinion about the risks the digital currency poses only seems to get larger.
When FinCEN issued its innocuously entitled guidance, "Application of FinCEN's Regulations to Persons Administering, Exchanging, or Using Virtual Currencies" in March, an already speculative currency may have received its death blow.
The alleged money laundering of $6 billion through bank accounts controlled by a virtual currency operator and its accomplices reflects widespread and serious anti-money laundering vulnerabilities, say industry experts.
The U.S. Justice Department is expected to decide within the fiscal year whether prosecutors can bring charges against entities using a controversial virtual currency, an FBI official said Thursday.
While the popularity of virtual worlds has grown in recent years, lawmakers and regulators have been slow to address related vulnerabilities to financial crime, according to Dr. Clare Chambers-Jones, an associate professor in banking and finance law at the University of West England Bristol.
A digital currency company has incurred a nearly $3 million penalty for sanctions violations less than a year after its directors agreed to pay $300,000 to settle anti-money laundering deficiencies.
Sweden has granted a banking license for an Internet videogame that allows players to use real money to buy virtual goods, the first time such a license has been granted for online financial services.
A federal judge sentenced a digital currency company and its directors to three years of probation and a joint $300,000 fine after a plea deal on charges that the company had helped criminals launder money.
Online digital currency business E-Gold and its three principal directors admitted late Monday to laundering money and operating as an unlicensed money transmitting business.
Software firm MindArk, creators of Entropia Universe, is on the verge of releasing automated teller machine-style cards that allow players to access real dollars from their virtual world accounts, something consultants say will make them an attractive venue for criminals to launder illicit funds.