Bitcoin Still Very Much The Preferred Choice For Money Laundering

Today, I had lunch with the shadiest of shady characters. To give you a bit of a backstory, South East Asia is a well-known cesspool for Korean scam artists and gangsters, both from the North and South. Anyone involved with small business here will have their fair share of run-ins with these characters, and I personally once had money stolen by someone of similar nature. Some take part in investment scams, are banned from ever returning to Korea and meander around South East Asia like sewer rats. Others are involved with organized rings of human trafficking, drug dealing, or whatever the fuck those miscreants do for fun. There are a lot more of these folks than most think or know about, and they are some of the most audacious and intrepid business people I have ever met.

Being involved with blockchain technology for some time now and having my own practice in this space, I was invited to meet with one of the above characters via introduction from a neighbor and good friend of mine. He was looking for a partner to engage in cryptocurrency arbitrage – being that the exchanges in Korea are shit and charge spreads up to 40% above global prices.

This is his story.

He was a typical Korean gangster dude, the type you would see on the TVs with dragon tattoos covering most of his skin sans the face, and was a node in some kind of gangster ring in Korea. The details of his organization are unimportant, but his particular job was to convert Korean Won into Thai Baht, in which he earns a small margin on the spread – all cash transactions. At the moment, he moves about $100k USD worth per day.

Now, this provides an ideal use case for cryptocurrencies. I don’t condone it, but I understand it’s advantages. What he started doing was buying Bitcoins in cash, Thai baht, then taking said Bitcoins and sending them back to Korea for an immediate profit due to the difference in spread – classical arbitrage. As of today, there is only 1 crypto exchange in Thailand, which is where his account sits and business has been going swimmingly.

Until yesterday.

The exchange noticed only large BUY orders coming out of his account that were being sent immediately to another, on a regular basis – an immediate red flag. This prompted the exchange to shortly thereafter shut him the fuck down, freezing his account due to suspicious money laundering activity and thus putting his business to a standstill. Now he wants someone to set up shop and supply him cryptos to the tune of $100k a day, for a marked up profit of course.

Normally, this would have been a tempting offer but if god forbid I decided to partner with this G I wouldn’t have learned anything from past failures. Plus, I would never associate my name with dirty money because I simply don’t have to.

Naturally, you will get asshats like these that will taint the face of cryptocurrencies, associating them with money washing and cyber criminals. This is an inevitable derivative of any new innovation in finance but the folks over at the exchanges are actually doing a pretty good job in policing what they can. More importantly, what I learned today was that nothing, not even the feds, can stop a man determined on getting his hands on crypto coin.