The bitcoin currency hit a record value of $ 40,000 on the exchange this week. Bitcoin, as is well known, is a crypto currency and nowadays a recognised means of payment. With bitcoin, however, there is no central authority or bank. Someone who wants to use bitcoins must have a bitcoin wallet and one or more bitcoin addresses. A transfer is not made to a person's account, but to a bitcoin address created by the bitcoin wallet. A bitcoin address can easily use a pseudonym. As a result, bitcoins make it easy to participate in payment transactions anonymously. Transactions are visible, but parties are largely elusive. This is also due to the deployment of, for example, bitcoin mixers, which break the digital trace of the transaction and effectively erase it.

The anonymity of bitcoin is broken the moment bitcoins are exchanged into euros or other currencies. Indeed, a credit to a non-anonymous bank account appears. Individuals who wish to remain anonymous can then use a bitcoin merchant. The bitcoin trader obtains bitcoins and exchanges them at an exchange office. The bitcoin trader receives the money in his account, deducts a high commission from it and withdraws the remaining part in cash, for example, for bitcoin owners. Only the trader comes into the picture. The owner of the bitcoins does not. 

Risk of money laundering

In principle, the above practice is not punishable. The bitcoin trader caters to a need and can charge high amounts for it. Some people are willing to pay a lot of money to remain anonymous. However, the anonymity of bitcoins increases the risk of money laundering. Therefore, case law in recent years shows that the line between a commercial bitcoin trader and a criminal bitcoin trader is very thin. 

Money laundering involves, for example, trying to hide the origin of money through transactions. In principle, it should be money derived from crime, but it can also occur if the predicate offence is not known. If one knowingly exposes oneself to the substantial probability that the bitcoins were obtained by crime, money laundering may also be at issue. The person then acted with conditional intent to launder.

Case law on bitcoins and money laundering

In 2017, the Central Netherlands District Court already considered that 90% of the products on the Dark Web are illegal products. A payment on the Dark Web can only be made by paying with bitcoins. The court then assumed that almost all bitcoins coming from the Dark Web have a criminal origin. 

In 2019, Rotterdam District Court considered that it is a fact of common knowledge that bitcoins are often used in the criminal circuit. And also in a recent Rotterdam court ruling, a link between bitcoins and money laundering was again established. It was considered that although bitcoins may not be able to be traced from which crime they originate, money laundering can still be proven if, based on the facts and circumstances, it cannot be otherwise than that the money originated from any crime. This will look, for example, at whether the bitcoin merchant has kept detailed records, the commission rate applied and whether the bitcoin merchant offers payment in contact money. If that is not the case, the prosecution is sure to set off alarm bells

When the facts and circumstances justify a suspicion of money laundering, the accused is required to be able to provide a concrete, verifiable and not a priori highly improbable explanation. The accused must then make a plausible case that the bitcoins did not originate from any crime or that he could not reasonably have suspected that they would have a criminal origin. 

What to do if you are suspected of money laundering

Despite the fact that the bitcoin currency is gaining popularity in society - and even among large institutional investors, such as pension funds - jurisprudence mainly paints a negative picture of bitcoin trading. An illegal origin of bitcoins is quickly assumed by courts, especially when they turn out to originate from the Dark Web. In that case, the ball comes down to the defendant to make a plausible case that he could not reasonably have known that the bitcoins had an illegal origin. If you are suspected of money laundering as a trader in bitcoins, it is important to make a timely statement with your lawyer to ensure that concrete knowledge of an illegal origin cannot be established. This will put the ball back in the prosecutor's court. 

Ms M.F.M. Ortner