By CCN: Bitcoin is a lousy tool to launder million and billions worth of cash. But the same cannot be said about a mere $6,989, as not noted by Malcolm Turnbull. The former Australian Prime Minister led his office to launch a crackdown on cash-in-hand…
By CCN: Bitcoin is a lousy tool to launder million and billions worth of cash. But the same cannot be said about a mere $6,989, as not noted by Malcolm Turnbull.
The former Australian Prime Minister led his office to launch a crackdown on cash-in-hand payments. The liberal government in May 2018 proposed to modify the anti-money laundering bill with a cash spending threshold of A$10,000, a U.S. dollar equivalent of $6,989. They argued that a dollar-value cap would limit the “opportunities to under-report income, charge lower prices, and underpay GST,” adding that the crackdown would eventually raise “billions of extra dollars” for the national treasury.
The economy-wide cash payment limit eventually received a parliamentarian nod. It is now set to become a law, effective July 1.
Despite their good intentions, the Australian government cannot guarantee a full-fledged success for their cash-limit program, especially when alternative solutions like bitcoin are emerging on the sideways. The anonymity, speed, and reachability at which the decentralized payment network operates have made them attractive to both criminals and terrorists. BTC-e, for instance, facilitated $4 billion of criminal proceedings during its six years of running an unregulated crypto exchange. The 2017 WannaCry ransomware attack, sponsored by the North Korean government, received ransom payments in cryptocurrencies worth more than $140,000.
Of course, those were high-profile cases. But that is the exact thing which made it easier for agencies to trace them. Transactions carrying high-dollar values helped the police identify the wallet addresses which further allowed them to locate the IP addresses of the perpetrators. On the whole, the agencies knew what they were chasing.
That, unfortunately, will not be the case when it comes to small- and medium-sized businesses in Australia. AUSTRAC, an Australian government financial intelligence, will have hundreds and thousands of suspects, to begin with. They would need to allocate more resources – in both human and computation – if they want to track every small BTC transaction taking place on/via local IP addresses, which could be millions. Then again, the use of VPNs could further hamper the task of tracking down tax defaulters in Australia.
It does not mean that merchants in Australia will attempt to bypass the A$10,000 cash transaction limit. But the fact that they can alone make it impractical for AUSTRAC to launch a nationwide blockchain investigation program. China faced a similar issue while imposing its capital control plan. India too found it difficult to track bitcoin-enabled tax defaulters during its demonetization drive.
Last modified: January 10, 2020 3:32 PM UTC