Gardai believe criminals are using bitcoin ATMs to turn illicit cash into cryptocurrency because of the difficulties they face laundering cash during the pandemic.
Bitcoin ATMs allow users to exchange cash for cryptocurrency in a matter of seconds. Like normal ATMs, they are found in locations including convenience stores, internet cafes, shopping centres and service stations across the country.
Gardai suspect their use as money-laundering sinks has been accelerated by the pandemic. They say fraudsters and drug dealers have found it difficult to launder cash during lockdown because many of their front businesses have been closed or could not purport to have high cash turnovers.
Barbers, hairdressers, clubs, bars and nail bars are among the businesses often used to launder money. They are also the businesses that have suffered reduced trade during the pandemic. Cash couriers have also been unable to travel about freely.
Intelligence gathered by the force suggests that certain bitcoin ATMs are being used on a daily basis to launder illicit money.
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Gardai have already obtained intelligence which shows cash earned from advance fee frauds and cyber-enabled crime is being exchanged for bitcoin, which is deposited in crypto wallets often held on mobile phones. The currency can then be transferred to any part of the world in seconds.
In some cases, bitcoin purchased at ATMs in Ireland has been lodged into so-called tumbler accounts, where illicit funds are mixed with clean cryptocurrency, and then redistributed into smaller amounts.
Bitcoin is ideally suited for money laundering, say gardai, because it has no defined ties to real-world identities although every transaction is recorded on blockchain, a digital ledger that anybody can see, leaving a visible trail of where money is being sent and received. Tracing lodgements and transactions presents challenges, however.
The purchase of cryptocurrency like bitcoin is not regulated by the Central Bank, which obliges all financial institutions that handle cash deposits to report suspicious transactions.
Bitcoin was the first payment network powered by its users. It has no central authority and trades on internet exchanges.
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A security source said: “There is a certain level of financial transactions being conducted at certain ATMs which appear to be of a criminal nature. The frequency of the deposits and those making them is indicative of crime.”
A garda spokesman said the force was “very aware” in general terms of the use of cryptocurrency in connection with serious organised crime.
“While cryptocurrency is not regulated by the Central Bank, it is not illegal to trade in or invest in cryptocurrency, most of this activity taking place online. An Garda Síochána are aware of the locations of bitcoin ATMs throughout the country,” he said.
