Bitcoin anonymity is just a big myth – and using it to launder dirty money is stupid, a crypto ATM chief says | Currency News | Financial and Business News

Many people think bitcoin transactions can be anonymous or undetectable, but they misunderstand how the process works, said Ben Weiss, CEO of crypto ATM operator CoinFlip, at a webinar on digital assets this week.

“It’s not anonymous. It’s pseudo-anonymous. You can’t buy large amounts of Bitcoin without a KYC or ID or driver’s license,” he said, referring to “Know Your Customer” and similar identification checks.

“Bitcoin is more transparent than typical things in the financial system in many ways,” he added.

The perception is that since digital currency is often associated with illegal activity, it must protect the identity of the user. But that’s not true, said Weiss.

The Bitcoin addresses may not have names registered, but in practice they can be linked to real identities, he noted. That’s because every investor needs to log their personal information before buying the cryptocurrency.

A recent incident, the recovery of much of the $ 4.4 million ransom that Colonial Pipeline paid to a Russia-affiliated hacking group, begs the question of whether Bitcoin is free from government control and tampering.

It is not known that law enforcement agencies can track down Bitcoin purchases if they are willing to put in enough effort, Weiss said.

So one of the stupidest things to do would be to try to launder dirty money with bitcoin, Weiss said. The U.S. government can track Bitcoin transactions with the help of blockchain analysts and by serving district court-approved seizure orders, he said.

“You’re really playing with fire if you try today,” he said, adding that bitcoin transactions are more traceable than cash.

Taxes are an area some people are still learning to be open to when it comes to cryptocurrency transactions. Many U.S. taxpayers may not realize that if they fail to report crypto assets when filing their annual return, they may be discovered and there are ramifications. Transactions on the blockchain are not hidden and the records are public.

To track down unreported crypto-related income, the US Internal Revenue Service has launched Operation Hidden Treasure. A dedicated team of IRS law enforcement professionals seeks and targets taxpayers who do not list cryptocurrency transactions on their tax returns.

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