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When trading with bitcoins using mtgox, or bitcoin-24, or bitcoin.de, you will have in your account many transfers of money, to many people and from many people. In europe if the sum of the transactions is more than 10.000 €, your bank should send a notice to anty-laundering authorities.

How do you manage it?

Nicolas
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  • If you want your bitcoins not to be traced to you, one good way is to buy/sell them via localbitcoins.com – ripper234 Feb 24 '13 at 14:22

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I think your premise is flawed - when trading on Mtgox or other exchanges, there will only be transfers between you and Mtgox. If you're a day trader most trades will be internal on Mtgox and not be settled by the banks at all.

Even if they do "send a notice to anti-laundering authorities", it doesn't mean the next day they will show up at your doorstep to arrest you, it just means those authorities are aware of the transactions, and if they detect a suspicious pattern they may ask you questions. In this case you can just tell the truth.

Meni Rosenfeld
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  • The fact is that in some countries you have to report every transfer that you send/receive above some amount of money. How do you explain the bitcoin trade? As a currency transactions? As a second hand trade (pieces of software)? ... – Nicolas Feb 24 '13 at 17:01
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    @Nicolas: You bought (or sold) virtual goods. – Meni Rosenfeld Feb 24 '13 at 17:20
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I think this is a great question and contrary to many of these responses it is entirely feasible that you may need to explain these funds to either a regulatory body or law enforcement. Unfortunately, gov'ts tend to fear what they don't understand and that in turn means they will often act in ways they normally wouldn't in a more 'normal' situation.

I work in the industry in compliance it simply isn't true that the burden of proof is on the gov't. In the US if a financial institution reports on you AND if that reporting triggers action you very well may need to explain where these funds came from. And if you can't there may be some issues that go along with that. And folks must understand when it comes to anti money laundering and anti terrorism finance. Many governments are on the same page and their laws/rules mirror each other very closely.

To answer the OP- If you are getting the funds legally your best tool will be record keeping. Each transaction should be noted, with a description and if possible show a purpose i.e. January 26th 2013 market price of btc gained/lost X percent and my previous investment of XXX is now worth XXX. And of course you should have some register of how you came about those funds initially. As in Sept 3rd 2012 used $XXXX grandma gave me for my B'day to but X amount of bitcoin.

This way anyone asking can see a clear chain of your transaction history. If you are asking how to launder funds it wouldn't be proper for me to answer that or to tell you the best methods of laundering.

John Kay
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A key component behind US and EU anti money-laundering statutes is that the burden of proof is on the accuser/government to determine an illicit source

The mere fact that the source is obfuscated means nothing. The irony for the accuser being that effective obfuscation will hide the source.

Second, as mentioned. The trades are done at an exchange and not through your EU bank.

CQM
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  • I think that in most EU countries this is not correct. In my country you must prove that the source of those funds are licit. – Nicolas Feb 24 '13 at 16:57
  • @Nicolas oh wow, that is an interesting twist. I read the EU directives on AML regulations, and just assumed the member countries implemented them the same ways – CQM Feb 24 '13 at 18:15
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Let's say I sell baseball cards. And today I buy one that is rare and hand over more than €10K EUR to the seller. Do I need to explain that the "anti-money laundering authorities"?

The answer is no.

Stephen Gornick
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