The relationship between crypto currencies and money laundering

Black money, which is defined as income earned from illegal ways, is one of the important elements of the informal economy. Black money refers to income from illegal activities such as drug trade, arms trafficking, human trafficking and financing of terrorism. Black money poses an important threat to the economic and social structures of countries, as it is associated with these activities. The term money laundering also refers to the transactions carried out in order to bring these revenues to a legal status. Any asset of monetary value can be an element of a money laundering crime. Money, gold, commodities, real estate etc. assets can be used for money laundering. Cryptocurrencies, which have been widely used in international markets in recent years, are attracting attention as a potential money laundering tool. The features of cryptocurrencies such as the fact that the legal framework has not yet been determined and that they are not audited by a central authority make them attractive for illegal transactions. In this study, primarily the theoretical infrastructure of money laundering and cryptocurrencies were examined. Afterwards, the relationship between cryptocurrencies and money laundering transactions, in particular Bitcoin, was examined. It is seen that transactions made over Bitcoin, the most common crypto currency, have attractive aspects in terms of money laundering. In particular Bitcoin, the reasons for the preference of cryptocurrencies in money laundering, thanks to anonymous accounts, identity information and the source of money can be hidden, they do not have a central supervisory structure and it is very difficult to audit and control due to the fact that transactions take place between peers. Due to the fact that transactions are carried out in the digital environment, they can be carried out easily, with minimum transaction costs, quickly and irreversibly. And also transactions are encrypted in the blockchain, are difficult to control and prevent. As a result of the study, it has been observed that the legal limits of these new currencies, which are used globally, change from country to country and will continue to be attractive for money laundering and many crimes unless a common denominator is found.