Security researchers identified a new trend of conversations from Bitcoin to cash in their analysis of dozens of dark web marketplaces. Scammers are selling hard cash for only 10 cents on the dollar to buyers willing to provide a prepaid fee in Bitcoin.
What is the scheme of Money laundering?
The money laundering scheme offer up cash, typically from $2,500 to $10,000, in exchange for a 10% to 12% fee payable in Bitcoin. Once the buyer has transferred the cryptocurrency, they provide details of the bank, PayPal or Western Union account where the money should be sent. As a simple, this arrangement offers buyers high returns on their purchase and removes the risk of logging into compromised accounts.
As the report outlines, money mules are agents who transfer ill-gotten funds between accounts in exchange for a fee of 10% to 20% of the value. Such actors typically open costly business bank accounts in order to avoid triggering fraud alerts or drawing unwanted attention when transacting large volumes.
Notably, this conversion scheme benefits those selling the stolen funds because they avoid taking possession of the funds and instead merely transfer them — meaning the buyer carries the risk.
An attractive offer for Money launderer
Head of Armor’s Threat Resistance Unit, Chris Hinkley said:
“For those scammers who don’t possess the technical skills and a robust money mule network to monetize online bank account or credit card credentials, this is an offer that can be very attractive […]. This clever service gives them an additional channel for monetizing the large amounts of financial data available on the underground.”
U.S. Treasury Secretary, Steven Mnuchin claimed that cash is not laundered to the same extent as Bitcoin, declaring that the government was intent on preventing the cryptocurrency from becoming the “equivalent of Swiss-numbered bank accounts.”
Reporters responded Mnuchin, quipping in response that his argument was somewhat illogically that:
“‘The existing system has never been used for illicit activities but we’re going to make sure crypto isn’t used for illicit activities like the current system. Got it.”