Academics have discovered that Bitcoin (BTC) is being illegally traded for cash in dozens of market places and forums in dark web.
Traders who are little bothered about abiding by the rule of law are selling their fiat money for 10 cents to 12 cents on the US dollar to buyers who accept to pay a fee of 10% to 12% in the form of Bitcoin.
The details were provided by the Q3 2019 Black Market Report released by Armor’s Threat Resistance Unit.
In the reported cash-to-Bitcoin illegal conversion scheme, cybercriminals pay between $2,500 and $10,000 in hard cash for 10% to 20% fee payable in Bitcoin.
Once the cryptocurrency is transferred to the stipulated address, the bank, Western Union or PayPal account needs to be provided for receive fiat money as per ratio mentioned above.
As it can be understood, the system offers astronomical returns to buyers who are willing to pay fiat cash and acquire illegally amassed cryptos, but removes the need for an intermediate money mule or risk themselves by using compromised accounts.
Money mules are basically intermediates or agents who move illegally earned money in exchange for a fee of 10% to 20% of the total value of transaction. Such agents generally establish bank accounts with huge balance to avoid fraud alerts from being triggered while involving in such deals.
Principally, the cash-to-Bitcoin exchange process aids the sellers who have amassed money illegally as they would like to quickly to wash them while placing the risk on the buyer who acquires the illegal funds.
Chris Hinkley, head of Armor’s TRU team, explains how criminals who are no tech savy are using the service:
“For those scammers who don’t possess the technical skills and a robust money mule network to monetize online bank account or credit card credentials, this is an offer that can be very attractive […]. This clever service gives them an additional channel for monetizing the large amounts of financial data available on the underground.”
It can be remembered that the US Treasury Secretary Steven Mnuchin has asserted recently that fiat money is not laundered in the same manner as Bitcoin, announcing that the government aims to block the crypto from turning into an “equivalent of Swiss-numbered bank accounts.”
Reporters reacted to Mnuchin’s position with some reservations, whispering in return that his reasoning was fundamentally — and rather irrationally — that:
“‘The existing system has never been used for illicit activities but we’re going to make sure crypto isn’t used for illicit activities like the current system. Got it.”
