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Michael Hearns

launderingmoney.com

Cryptocurrencies and Crime Part II. "The Stall of Momentum, why Money Laundering may not be entirely what lies ahead." By Michael Hearns of LaunderingMoney.com

 

The incredible rapid assent of value in cryptocurrencies may actually be a hinderance to any money laundering activities associated via cryptocurrencies. 

The most often referred to principal in money laundering is that a large amount of income is being derived from an illegal activity. The volumous amount of fiat currency generated from the illegal act necessitates that the origin and connection of the crime's profits must be disguised and removed from the source of the income.

But what about a cryptocurrency that in itself is generating rapid accelerated value? Would it be feasible to conduct a crime and gain a cryptocurrency payout and then try and launder it to a fiat currency when the value of the cryptocurrency keeps soaring? What like minded criminal would want to part with a cryptocurrency coin to pay for a criminal enterprise when a fiat currency will meet the criteria thus allowing the criminal to keep the cryptocurrency and its soaring daily value?

What s beginning to happen is those who are in possession of cryptocurrencies will hold those currencies due to the impactful eye astounding rises in their value. The crypto currency market will become a closed loop with those in possession holding onto cryptocurrency and nullifying the rationale for using them to facilitate a crime. The value and the expected value adjusted trajectory is too high thus making the potential crime proceed equal to or less than the crime payout.

If one kilogram of Cocaine is valued at $25,000 (current Florida price in Miami is $20,000-$28,000)

Why would you spend $25,000 in cryptocurrencies that may be worth $42,000 in 20 days or less?

 

The real potential scenario is that Cryptocurrencies will be prurchased via crime profits and yes- that will satisfy a money laundering requirement; but as the inflated profit margins in narcotic sales fuel the cryprocurrency enviornment only those able to dump inflated drug profits into cryptocurrencies will make it a closed loop economic model. As we have seen with other limited available currencies (South African Krugerrand, Continental USA Army 1776 currency, European Ducat ...etc) when the loop is closed the value either stagnates amongst those still holding the currency at the onset of the closure or it becomes a currency of choice only for a select few. As the value of cryptocurrencies continues to rise only those within the loop will have the accessibility of ownership and their buying options will be limited due to the out of reach values for the majority of the populace, and the intrinsic value gained in the loop process. It will be to valuable to spend and only those who acquired it will be able to engage with it.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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