Abstract
PurposeThis paper aims to shed light into money laundering using bitcoin. Digital payment methods are increasingly used by criminals to launder money obtained through cybercrime. As many forms of cybercrime are motivated by profit, a solid cash-out strategy is required to ensure that crime proceeds end up with the criminals themselves without an incriminating money trail. The authors examine how cybercrime proceeds can be laundered using services that are offered on the Dark Web.Design/methodology/approachFocusing on service-percentages and reputation-mechanisms in underground bitcoin laundering services, this paper presents the results of a cash-out experiment in which five mixing and five exchange services are included.FindingsSome of the examined services provide an excellent, professional and well-reviewed service at competitive cost. Whereas others turned out to be scams, accepting bitcoin but returning nothing in return.Practical implicationsThe authors discuss what these findings mean to law enforcement, and how bitcoin laundering chains could be disrupted.Originality/valueThese cash-out strategies are increasingly facilitated by cryptocurrencies, mainly bitcoin. Bitcoins are already relatively anonymous, but with the rise of specialised bitcoin money laundering services on the Dark Web, laundering money in the form of bitcoins becomes available to a wider audience.
Highlights
Nowadays, cryptocurrencies – like bitcoin – are commonly used in a variety of cybercrimes
This paper aimed to examine in which ways cybercrime proceeds that are obtained in the form of bitcoin or converted to bitcoin can be laundered
Following up on previous studies, we focused in particular on money laundering services – both mixing as exchanging – offered for bitcoin on the Dark Web
Summary
Cryptocurrencies – like bitcoin – are commonly used in a variety of cybercrimes. (1) cyber enabled crime, i.e. crimes that are enabled by computers and the Internet (such as hacking and malware); and (2) cyber assisted crime, i.e. criminal behaviours in which computers and the Internet assist in committing crimes (such as drug trade on online forums) (McQuade, 2002; Burden and Palmer, 2003). In both types of cybercrime, bitcoin can be seen as an enabler of the digital criminal enterprise. Criminals start to embrace bitcoin as a partner in their cash-out strategy and launder money aided by bitcoin (Möser et al, 2013)
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