[lifeisstillgood]

I'm fascinated by this but would like to walk it through (and no, with London and NYC as two of worlds biggest money laundering centres I think this seems likely)

I have millions of dollars in yuen in Guangdong - and I want to get it out of the country, or I have millions of dollars of cash from selling drugs in Mexico.

Then, I buy a number of ASICS and plug them in? I doubt I will get millions that way but it's a start, maybe I ... hmm the on-ramp is complicated - getting from dollar bills to bitcoin already requires laundering.

Ok, let's say I have my coins - transferred to me via the age old solution of handing cash to someone with bitcoins and they transfer them to my wallet. But of a giveaway but ok. Let's call that DirtyWallet.

Now I find a NFT company - it makes digital photos of the sidewalk in NYC and sells each paving stone online. The idea is to hide money laundering.

I buy half the paving stones on Broadway for a dollar each, from CleanWallet. Then I auction my paving stones, and amazingly they are all bought up by DirtyWallet for a million each.

CleanWallet now has millions and is ready to off-ramp.

I kind of get it but not really - it does nothing new - it still needs corrupt on ramp and off ramp people in corrupt places in the world (like London) - and that's where the real cost will come. The washing (transactions to hide origin) is the simple part - I would want to wash the money through family restaurants in MidWest (where the owner got in deep with low shark) or the other traditional approaches as well.

It just looks like this will be a small part - and given it public traceability i suspect a small part - once someone gets traced through the blockchain this will be avoided

[leereeves]

It's a lot easier if the dirty money is already crypto, from ransomware, dark web transactions, etc.

Then the crypto is untraceable at both ends: one side leads to the victim, the other to someone with plausible deniability: "I was just selling art at market value. I didn't have anything to do with that crime, and I don't know the person who bought the art." In between, nothing but an anonymous wallet and an untraceable transfer of NFT.

[lifeisstillgood]

I should imagine ransoms are payments are tracked. Tracking who gets paid for the ransom is surest way to end them. And it only takes one mistake to stain all the transactions.

Deniability is hardly the point - all dodgy transactions are deniable, it's just whether people care to pretend to believe you - the UK has anti-money laundering laws that basically say if you cannot reasonably prove your money is it dodgy we will take it. https://news.sky.com/story/zamira-hajiyeva-supreme-court-rej... - the criteria here is basically "do we believe do you" - it's really nebulous.

[qqii]

All it takes is a mixer with a large enough anonymity set.

[lifeisstillgood]

The larger the set the greater likelihood of a coin designed to track joining ?

[qqii]

I'm not sure what your question is. In brief a mixer could works like the following:

Multiple people put money into a pot, in return they get an voucher that anyone can redeem.

At some later point in time someone redeems some money from the pot.

The anonymity set for this mixer is the number of people who put money into the pot. The more people that use this, the more anonymous.

[nathancahill]

This is the best explanation in the whole thread.

[qqii]

On ramping cash is the most difficult as regulations are tighter. If your money is clear and you can obtain crypto with a paper trail then there are possibilities to break the paper train once on chain. NFTs don't help here but investing in an anonymous smart contact that gets "hacked", buying a token that is rug pulled, betting in a casino, or some other way to lose money to yourself. From there a mixer with a good anonymity set should be good enough.

If, as you suggested you can obtain crypto without a paper trail then your plan might work. Since there's no paper trail you could even setup multiple sock puppets.

Then it would be more sensible for your CleanWallet to be owned by an NFT Art producing company. The become popular "over time" using your sock puppets and may even garner real attention (commissions per sale isn't uncommon and is a free bonus for the fees you've spent).

Alternatively you could run the NFT platform and take X% commission. With your sock puppets you mint and buy NFTs left and right. Maybe you'll even get some real business.

Both of these ideas shouldn't be difficult to off It's not uncommon for a crypto company to invest in other crypto companies which could add another layer of in direction.

This is all quite speculative and the ideas require a decent amount of effort. For the most part I agree that the use of crypto and NFTs to launder money is a bit overblown.

[jb775]

> The washing (transactions to hide origin) is the simple part

Isn't this the hard part? Not only this, but having to worry about physical transactions involving money...or the risk of traditional digital trails of bank transfers, etc?

My understanding is that NFT could clean up this aspect by 1) removing money transfer risk (probably use some sort of smart contract to guarantee transfer of NFT immediately to buyer upon successful bank transfer to seller) and 2) transferring underlying valuation to a subjective-valuation industry. Washing $ through a restaurant would open the restaurant up to possible scrutiny to prove they had higher food costs, etc...but NFTs appear to remove that risk since no one can really question increases to value of "art".

Also, technically the owners of the "high value" NFT could even be kept in the dark on the shady details if they are offered a quick buck by some offshore lawyer. They could probably even set it up to guarantee eventual transfer back to the original owner (netting them ~10% or so).