Fortnite V bucks have recently been accused of abetting money launderers. The in-game currency that is used to buy skins for your avatar seems to be a target for the criminal underworld. Fortnite has amassed huge success over the past year, yet the outrage over money laundering is nothing compared to how mainstream media often views cryptocurrencies. This is often one of the main complaints placed against Bitcoin. Yet when you dig a little deeper, money laundering via Bitcoin is harder than you think.
If you’re going to use a cryptocurrency exchange that allows for fiat deposits, then there is a high chance that KYC will have been implemented. This clearly allows the exchange to know who is trading Bitcoin. On top of this, exchanges now have the software available to analyse the Bitcoin addresses you are sending and receiving from. More than likely, if the addresses are linked to known dark web services, they will freeze your account.
Without such measures, it is unlikely that many cryptocurrency exchanges could work within the existing financial regulation required. Privacy coins such as Monero or Zcash are often left off of major exchanges due to the risk that the exchange cannot keep track of the addresses. If one were to money launder even with privacy coins, the KYC aspect still provides issues.
Bitcoin, by being pseudo-anonymous, allows for transactions to be traced across the whole blockchain. Therefore, as a tool for money laundering, the cryptocurrency is certainly not ideal. The notion that is pushed by mainstream media doesn’t cut the mustard. Of course, as a new form of money, in the early days, Bitcoin would have been a much more suitable tool. But as more regulation creeps into the industry, this will become harder for criminals.
The other criminality issue involving cryptocurrencies is its use as a ransom, which we have covered widely here. This is a much larger issue within the space right now that needs solving. But nowadays, the money laundering issue is a non-starter.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.