Well, in my opinion they are not and I will give you a couple of reasons why I say that.
The first one come from the Messari report that you can find here. It is a study dated 16th July 2019. It’s just one year ago and considering that regulations have been coming, I do not think that this 800:1 ratio that they have found is far beyond the reality.
Yes, you probably understood correctly: for every 800 traditional dollars used in illicit businesses, only one dollar in cryptocurrencies value is used for illicit markets. So normal dollars (or other fiat currencies of course) are 800 times more preferred for money laundering than cryptocurrencies.
You know, cryptocurrencies are traced and if you want to convert them you have to step by regulated fiat-to-crypto exchanges (Coinbase, Binance Jersey, Kraken and so on). All of them requires identification of the person (KYC) requesting to exchange crypto to fiat or fiat to crypto and withdraw fiat currency from converted cryptocurrency. And if you are changing a lot of money, they will require several documents to prove the origin of those funds (AML).
You can even convince them that the money is legit from an inheritance for example. But are you sure you are going to convince banks as well? I tell you the answer: NO. Banks will request all sort of documents proving the origin of the funds, and finally they will eventually reject the payment from the Exchange to your Bank Account. Rejection, Freezing, strange time delays in acceptance. No matter what, you will likely be asked about what you are doing.
I got again your objection: money launderers will send Bitcoin for cash money. Maybe. But they will be just moving the problem from one person, to another. Someone will still need to liquidate those Bitcoins.
I am telepathic and I got your next objection. You are thinking of Monero or Bitcoin Mixers. Have you seen Monero easily convertible to fiat currencies? If yes, well, tell me where you can do that since I probably missed it. And about Bitcoin Mixers, there are many corridor voices telling that exchanges do not really like cryptocurrencies coming from Bitcoin mixers, and they may eventually freeze your account or just suggest you to move your cryptocurrencies somewhere else. So, who is really going to make this crypto-to-fiat conversion if you are trying to use anonymous cryptocurrencies or crypto-mixers?
You know what?
From my point of view cryptocurrencies are just not created for money-laundering. They have been created to become the money of the people with no intermediaries required. But Satoshi Nakamoto knew that for a long period cryptocurrencies were going to deal with banks so it created a transparent enough structure to be accepted even from the banks.
What is your experience about it?
