Money laundering legal loophole?

[pawel7777]

If I understand correctly (correct me if I'm wrong), creating meme tokens/coins is not illegal in any Western country, provided they are not utility tokens and are not marketed as investments or promising returns, etc.
As such, what's stopping anyone from doing this:
> create a meme coin on some cheap blockchain
> don't hype it up officially yourself, but just give it away for free on anonymous forums etc (i.e. to your friends, your own other accounts or even genuinely to some real strangers)
> try to create some hype with fake accounts or paid shills etc to create an impression that a market emerged on its own
> buy them from yourself with "dirty" crypto on decentralised exchange
> report your income and pay tax on it
> live happily ever after

Given how some random meme coins can explode within a few days and then die, you could potentially launder millions and still make it look legit.

Am I missing something here? It seems way too easy. If so, should we expect some further crackdown either on decentralised exchanges or a ban on issuing own tokens (which would be insane)? If the loop is legit, I can't imagine it won't be massively exploited (if it isn't already) and that regulators will tolerate it for long.

Thoughts?

[joniboini]

I can see that happens. The hardest process is probably trying to hype the tokens and making sure that you have enough liquidity to dump the tokens after that. I don't think it is as easy as paying random people to like your post. Even if you manage to do all of these, there's a chance that someone would sniff it out and report what they found online, potentially making it difficult to sell your meme tokens hence you can end up with less wealth in the end.

I believe the government is already trying to crack down on DEX anyway with some websites forcing people to KYC or blacklist if their IP is from the US or other countries. I doubt it will die though. Banning people from issuing their own tokens would imply controlling the blockchain itself, I doubt they can do that. Sure, they can publish the law but who knows how much manpower is required to stop random people publish their tokens online. Maybe they'll ask exchanges to stop listing meme tokens or something similar for that.

[target]

This must be the answer to the question what are memecoins for. Yeah it should be easy steps for finance criminals but isn't BTC started this way too? Can we also say BTC was a loophole that time?

Only a few people knew BTC when it started and then gradually things are becoming good until there are exchange hacks then regulations came.

[dkbit98]

It's not that easy like you think, and you have to pay all the influencers.
I remember several famous people were involved in pump and dump meme coins and they later got accused and had to pay big fine.
There is a chance for someone to not get caught with lower amounts, but I wouldn't risk and waste time of meme crap.

[Findingnemo]

It can work for larger amount like in few millions and more but not everyone who is trying to launder their money is dealing in millions, my assumption is in thousands so it's not possible to create such buzz with that small amount and to be honest the funds required to market could be 50 and above of the total funds so they might not attempt this due to the practical difficulties.

[pawel7777]

It's not that easy like you think, and you have to pay all the influencers.
I remember several famous people were involved in pump and dump meme coins and they later got accused and had to pay big fine.
There is a chance for someone to not get caught with lower amounts, but I wouldn't risk and waste time of meme crap.

Remember we're not talking about creating a real pump here, but more about faking the pump to launder money.
Technically, you wouldn't even need any pump for that, but creating an impression that there was such, would make it more believable.

[dkbit98]

Remember we're not talking about creating a real pump here, but more about faking the pump to launder money.
Technically, you wouldn't even need any pump for that, but creating an impression that there was such, would make it more believable.

But all meme coins and tokens are pump & dump by definition, they are all fake and used only to earn money for their creators.
Most of the altcoins are created for the same purpose, with only few exceptions from the rule.
Few examples is stupid meme coins for Trump and other candidate (can't remember name) for US selections.

[Zed0X]

~
> don't hype it up officially yourself, but just give it away for free on anonymous forums etc (i.e. to your friends, your own other accounts or even genuinely to some real strangers)

> buy them from yourself with "dirty" crypto on decentralised exchange

You'd be lucky if you get the same amount if you do airdrop and also buy it from them. Well, at least you could claim deductions and lower you tax payments for the meantime (until you're audited)

Anyway, the use of tech could make it harder to detect but I believe methods like this has been done before. I read that launderers used the buying and selling of paintings before.

[TomPluz]

I am wondering of the same thing...and I am seeing that these days it can be so easy and inexpensive to start a memecoin but of course, we know that the harder part can be the marketing department. You can create your own memecoin anytime but there is no guarantee that it would be catching fire...in many cases sometime luck can actually be playing when the market is ripe for what you are bringing. These days, people would love to see a memecoin who got a very attractive narrative behind them just like $MOODENG and $PNUT. I am suggesting that one ahs to learn more on successful memecoins and get the features that can be common on them and yes you also need to build a respectable community supporting the project. Now, can we use the creation of memecoins as a strategy to launder illegal money...the answer can be a big YES but as for me there are better ways to launder money within the cryptocurrency market, just buy coins and then later on exchange them for cash but just be careful as there can be some prying eyes watching you and you can be under investigation.

[philipma1957]

Too convoluted too much work.

We live in a world where a banana duct taped to a canvas sold for 6 million.

the owner that paid $6 million then ate the banana.

https://www.yahoo.com/entertainment/crypto-boss-eats-banana-art-082216524.html?fr=sycsrp_catchall


why do all that crypto work when you can sell a banana canvas for 6 million

[dkbit98]

the owner that paid $6 million then ate the banana.

This really happened? 
I saw someone purchased this ''banana'' but I didn't know it was Justin Sun.
Not sure what he wanted to achieve with this waste of money, but he is crazy for doing this...
I hope he didn't eat the duct tape also.

[philipma1957]

the owner that paid $6 million then ate the banana.

This really happened? 
I saw someone purchased this ''banana'' but I didn't know it was Justin Sun.
Not sure what he wanted to achieve with this waste of money, but he is crazy for doing this...
I hope he didn't eat the duct tape also.

It was likely a back door way to transfer the six million dollars.

I.e. money laundering.

Some early coin guys have 10,000 to 20,000 btc.

That is 1,000,000,000 to 2,000,000,000 billion in wealth.

So you are that guy. YOU may want women or men or drugs or what ever.

An artist sells the art for six million most of that is shifted to the gallery and the art agent [ pimps drug dealers]

And the crypto guy gets his dope or whatever.

This is way easier to do than launch coins.

[dkbit98]

It was likely a back door way to transfer the six million dollars.

I don't know in what country he is living now, but with this behavior and public stunts he is going to attract attention of law officials, who can investigate him more.
If they could arrest CZ they can sure arrest Justin or anyone else who is doing tricks like this.
btw he was not doing anything new, rich folks are doing stuff like this with paintings all the time.

[philipma1957]

It was likely a back door way to transfer the six million dollars.

I don't know in what country he is living now, but with this behavior and public stunts he is going to attract attention of law officials, who can investigate him more.
If they could arrest CZ they can sure arrest Justin or anyone else who is doing tricks like this.
btw he was not doing anything new, rich folks are doing stuff like this with paintings all the time.

painting sales are a tried and true method of money laundering and really really easy to do.

I am not rich and I am not young.

But if I was the owner of 10,000 or 20,000 bitcoins and say twenty five years old the idea of getting some hot working girls to play with would be very tempting. So I can see why people would do this with art.

As for the ops idea yes it can be done but it is harder to do.

[dkbit98]

painting sales are a tried and true method of money laundering and really really easy to do.

It's just one of many ways they are using to launder money, second most famous is donations, because there are no tax charges for most of them.
I could also say that many altcoins and tokens are also created for crypto laundering but that is a different subject.
Another way used all the time for money laundering is WAR and weapons selling, that is the probably the biggest one and longest lasting.