No Money Laundering
The issues, of course, center around Homeland Security’s watching out for any potential money laundering that might be going on via these sites. As such, OKPay issued this statement about their decision to end Bitcoin acceptance: “ [We want to] reduce the risks and potential dangers in connection with anti-money laundering legislation. Any financial transactions involving exchangers and stock exchanges trading bitcoin are now prohibited.” In other words, DHS, please leave us alone, we don’t want any problems.
In retaliation, perhaps, Mt. Gox, who up until now has used OKPay as a deposit conduit for customers, announced via press release that it is cutting ties with OKPay and will not take deposits from them anymore.
In addition to the DHS asset freeze a few weeks ago, another financial outfit, Liberty Reserve, was shut down recently as part of a money laundering investigation being conducted cooperatively between law enforcement agencies in both the U.S. and Costa Rica. Liberty’s founder, Arthur Budovsky Belanchuk, was arrested in Spain as part of the sting.
While Liberty itself is not a Bitcoin processor, it’s clear that all these companies are now paying attention to DHS and the DoJ, as far as their fairly new focus on alternative payments to traditional dollars, euros and pounds. Bitcoin was created about a decade ago specifically to be a method of payment that was undetectable and unregulatable by law enforcement, and while its popularity has grown, it is still far from a mainstream currency option. Looks like it may die on the vine with the Feds new incisive watchdog tactics surrounding it.
In addition to the unwanted attention from authorities, Bitcoin processing has posed some other issues for users and payment clearing operators alike; it’s been criticized for its relatively volatile exchange rate, inflexible supply, and minimal use in trade beyond gambling sites.