Legal Bitcoin ATMs are not ideal for money laundering

This article is written in response to an article by The Star which alleges “Vancouver considering a ban on Bitcoin ATMs — which police say are ‘ideal’ for money laundering“.

I’d like to note that it’s irresponsible journalism to continue printing off press releases without scrutiny or investigative journalism, it’s no wonder print is dying.

As for the subject matter at hand, we should start with definitions.

Blockchain is the underlying technology behind most cryptocurrencies. Bitcoin uses a blockchain, but there are many types of blockchains that do different things, including things other than cryptocurrency, such as binding smart contracts (a digital version of a legal contract). Cryptocurrencies refers to the entire family of bitcoin, and all of altcoins, of which there are thousands. Bitcoin is one cryptocurrency, and that which is available from most of our local ATMs.

It is true that cryptocurrencies can, and are used for nefarious purposes. Bitcoin has a reputation of being anonymous, but this isn’t true technically, or legally. It can be used pseudo-anonymously at best, if an ATM owner chose not to do Know-Your-Customer (KYC) and to do that, would be doing so illegally.

To operate a legal ATM, you have to be in compliance with both anti-money laundering (AML) and counter-terrorist financing (CTF) rules. This includes all sorts of rules, such as being legally obligated to report any large cash transactions, or even any suspicious transactions, to the federal government.

On top of that, it’s worth noting that most of the ATMs have a hard limit of $1000 CAD per day. If someone appears to coming close to this every day, that would be reported, as structuring.

This hopefully explains that since the first Bitcoin ATM ever was placed here in Vancouver, all of the ATM owners have to comply with some of the strictest reporting rules in the country — to ensure they’re not being used for the purposes that Vancouver’s mayor and the police are irresponsibly reporting.

Perhaps someone could ask the Mayor, and the police, to provide some evidence to validate their assertion. In the meantime, maybe they could focus on real estate, casinos, and pathways that are proven (with ahem, evidence!) to be related to money laundering.