( 25th - November - 2019 )
There are three aspects in this domain. 1. Future asset management, 2. Others policy and 3. About Future asset management
Illegal activities with virtual currency
FinCEN regulations
In 2013, the Financial Crimes Enforcement Network (FinCEN) released a paper stating exchanges and administrators of VC are subject to the Bank Secrecy Act (BSA) and must register as a Money Services Business (MSB). The purpose of this legislation was to prevent financial exchanges from being used to launder money or finance crime, including terrorism. The European Central Bank has also recommended registering exchanges to "reduce the incentive for terrorists, criminals and money launderers to make use of these virtual currency schemes for illegal purposes".
In spite of the BSA applying to VC exchanges and administrators, VC is still used to finance crime and launder money because not every transaction in VC networks are required to comply with the BSA and not every online exchange complies with the BSA. In September 2014, Robert M. Faiella, a/k/a "BTCKing", pleaded guilty to operating an unlicensed exchange that exchanged over a million in cash for Bitcoin, used for criminal enterprise and known as "Silk Road". Despite BSA regulations, Faiella and the users of his exchange, were able to hide their identity through both pseudonymous Bitcoin addresses and an anonymous network that hid their IP addresses.
Money laundering
The culture of laundering money in the Bitcoin network is so prevalent there is even a website called bitlaunder.com. The company bitlaunder.com claims they are "experts at laundering Bitcoin" and they "use the most sophisticated methods available to completely anonymize your Bitcoins and obscure their history from forensic tracing". The U.S. Government Accountability Office reported that the pseudonymity in VCs makes it difficult for the government to detect money laundering and other financial crimes, and it may be necessary to rely on international cooperation to address these crimes. Similarly, the European Banking Authority claimed that regulations should strive for "global coordination, otherwise it will be difficult to achieve a successful regulatory regime". In spite of the best regulations from the United States and the European Union, the inherent nature of the Bitcoin protocol allows for pseudonymous transfers of Bitcoins to or from anywhere in the world, so illegal transactions will not be completely eliminated through regulations.
Anonymity in Bitcoins and Altcoins
Anonymity in Bitcoins and Altcoins (forks from the Bitcoin protocol) can be increased by adding software augmentations to the VC. Zerocoin, for example, uses an algorithmic process called "zero-knowledge proof" to hide the value of the coins. Dark Wallet anonymously combines transfers of VC to obscure the origin of the transfer, and the developers intend to integrate the software into a Tor network in the future. One of the developers of Dark Wallet described it as "just money laundering software". He said, "I want a private means for black market transactions", "whether they're for non-prescribed medical inhalers, MDMA for drug enthusiasts, or weapons." A crypto-currency known as Darkcoin offers even more anonymity than Bitcoin. Similar to Dark Wallet, Darkcoin combines transactions to increase the difficulty of analyzing where the currency was sent. "Some users may be trading Bitcoins for Darkcoins and back again, using the Darkcoin network as a giant bitcoin-laundering service."
Other forms of VC have also been used for making illegal transactions. The VC service and exchange Liberty Reserve allegedly laundered over 6 billion dollars from crimes such as "credit card fraud, identity theft, investment fraud, computer hacking, child pornography, and narcotics trafficking". E-gold, a company with a VC tied to the value of gold, pleaded guilty to money laundering and running an unlicensed money transmitting business, and consequently had to forfeit $45,816,817.84 to the government.
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