Bitcoin anonymity is just a big myth – and using it to launder dirty money is stupid, a crypto ATM chief says

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  • A big misconception about bitcoin is that it’s anonymous and untraceable, CoinFlip’s Ben Weiss said.
  • Using bitcoin to launder money is one of the stupidest things to do, he said.
  • Bitcoin addresses have no name attached, but transactions can be linked to identities with some effort.
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Many people think bitcoin transactions can be anonymous or untraceable, but they’re misunderstanding how the process works, Ben Weiss, CEO of crypto ATM operator CoinFlip, said at a webinar on digital assets this week.

“It’s not anonymous. It’s pseudo-anonymous. You can’t buy any large amount of bitcoin without KYC or ID or driver’s licenses,” he said, referring to “know your customer” and similar identification checks.

“Bitcoin is actually more transparent in many ways than typical things in the financial system,” he added.

The perception is that because the digital currency is often associated with illegal activity, then it must shield the identity of the user. But that is not true, Weiss said.

The bitcoin addresses may not have names registered to them, but in practice, they can be linked to real-world identities, he noted. That’s because every investor is required to log their personal information before they buy the cryptocurrency.

A recent incident, the recovery of much of the $4.4 million ransom paid by Colonial Pipeline to a Russia-linked hacker group, raised questions as to whether bitcoin is free from government control and manipulation.

What isn’t well-known is that relevant enforcement agencies can track down bitcoin purchases, if they are prepared to put in sufficient effort, Weiss said.

That’s why one of the most stupid things anyone could do would be to attempt to launder dirty money using bitcoin, Weiss said. The US government can track bitcoin transactions with the help of blockchain analysts and through serving seizure warrants authorized by district courts, he said.

“You’re really playing with fire if you tried to today,” he said, adding that bitcoin transactions are more traceable than cash.

Tax is one area where some people are still learning that they are out in the open when it comes to cryptocurrency transactions. Many US taxpayers may not realize that if they fail to report crypto assets when filing their annual returns, these may be discovered and there may be consequences. Transactions on the blockchain are not hidden, and the records are public.

To hunt out unreported crypto-related income, the US Internal Revenue Service has launched “Operation Hidden Treasure“. A dedicated team of IRS criminal investigation professionals is seeking out and targeting taxpayers who are not listing cryptocurrency transactions on their tax returns.

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MoneyGram will allow customers to purchase bitcoin with cash at physical locations in partnership with ATM operator Coinme

  • MoneyGram announced that customers can now purchase bitcoin with cash from its thousands of physical locations.
  • MoneyGram partnered with cryptocurrency exchange and bitcoin ATM operator Coinme.
  • Through the collaboration, Coinme said which it be able will power more than 20,000 physical locations.
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MoneyGram International announced on Wednesday that customers can now purchase bitcoin with cash and withdraw bitcoin holdings converted to cash from its thousands of brick-and-mortar locations nationwide. The move is just the latest signal that bitcoin is becoming more mainstream.

MoneyGram partnered with cryptocurrency exchange and bitcoin ATM operator Coinme for the endeavor. Through the collaboration and its other efforts, Coinme said which it be able will power more than 20,000 physical locations.

“This innovative partnership opens our business to an entirely new customer segment as we are the first to pioneer a crypto-to-cash model by building a bridge with Coinme to connect bitcoin to local fiat currency,” Alex Holmes, MoneyGram chairman and CEO, said in a statement.

The new service will be rolled out at MoneyGram locations in the US in the coming weeks, and in international markets in the second half of 2021.

MoneyGram said it currently serves 150 million people across the globe in the last five years. In the US, it is one of the most popular wiring services, alongside Western Union.

The money transfer company joins a growing list of financial services firms encroaching on the cryptocurrency space.

Mastercard in February said it will offer support for customers to transact in cryptocurrencies this year.

PayPal’s Venmo in April also announced it will allow users to buy and sell cryptocurrencies, building on PayPal’s decision to allow users to buy and sell cryptocurrencies in October 2020.

Read more: The head of institutional coverage at crypto trading platform FalconX shares 9 Ethereum-tied digital tokens to take advantage of the DeFi revolution – and breaks down why Ethereum still has ‘significant’ upside

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