Newsweek

Bitcoin and Blockchain: A Money Laundering Bonanza?

Money laundering experts are concerned about Russia's new interest in cryptocurrencies.

In this photo illustration, a weathered model bitcoin stands on a table.
PG01_Russia Bitcoin_01

Nobody does the dark side of the internet better than the Russians. From AllOfMP3.com, once the world’s most popular piracy site, to the campaign to disrupt the U.S. presidential election, Moscow’s hackers have long been world leaders in cybercrime. So it’s no wonder Russian computer geniuses are heavily involved in the internet’s latest craze: virtual currency. And it’s not just attracting cybercriminals—the Kremlin wants to get in on the cryptocurrency revolution by issuing state-backed “bit-ruble.”

Cryptocurrencies, such as bitcoin, work on a technology known as blockchain, a decentralized network of synchronized online registries that track the ownership and value of each token. They can be used as virtual cash and traded like currency. Private companies can issue their own virtual currencies to finance specific ventures, similar to crowdfunding or bonds. And their future value can also be traded, like options.

With approximately $70 billion in bitcoins in circulation and more than 100,000 merchants around the world—including Russia’s largest online retailer, Ulmart—accepting similar forms of payment, “suddenly everyone has to take cryptocurrency seriously,” says Richard Titus, an investor of cybermoney. Virtual currencies are also a potential bonanza for money launderers, online blackmailers and cybercriminals—especially in Russia. And

You're reading a preview, sign up to read more.

More from Newsweek

Newsweek8 min read
How Steely Dan Nearly Went Insane for One Guitar Solo
Steely Dan blew through thousands of dollars—and as many as eight guitar players—just to nail down one solo. This is the inside story of the hit song "Peg."
Newsweek2 min readSociety
Weight Loss Saves Obese Adults Nearly $30,000
Obesity causes the U.S. nearly $210 billion a year in medical expenses, according to findings.
Newsweek2 min read
'Crazy Ex-Girlfriend' Creator Has Broadway Dreams
Rachel Bloom tells Newsweek she's written a musical called "Broadway Crazy" that she may someday develop.