Knowing your Bitcoin Customer: Money Laundering in the Bitcoin Economy

摘要

Cryptocurrencies like Bitcoin have the potential advantages to break traditional financial barriers, which have attracted great interests from civilian users, financial and online commercial industry, and researchers. However, a recent study [1] reported that approximately one-quarter of Bitcoin users and one-half of Bitcoin transactions are associated with illicit activity. Around US$72 billion of unlawful activity per year involves Bitcoin, which is close to the scale of the U.S. and European markets for illegal drugs. We have made an effort to understand and try our best to exhaustively discover Bitcoin mixing or tumbling services (essentially money laundering mechanisms) which exist or had existed. In our study, 69 services were identified, and evaluation of the public discussion around these services reveals certain trends in Bitcoin user understanding of privacy issues and enforcement of anti-money laundering regulation. So far, Law enforcement interference with Bitcoin laundering services is uncommon, while our study showed that most services failed due to lack of user trust. Trust is perhaps the greatest challenge amongst Bitcoin anonymization services, as many services that have existed appear to be outright scams, and even legitimate services sometimes disappear with user funds. We will report other observations and discussions at the end of the paper.