Researchers discover a new way for criminals to use Bitcoin and to perform money laundering as we are about to find out in our latest bitcoin scam news.
The criminals could use “exclusive mining” to pass off their money laundering as BTC mining income and as the researchers discover, it could be used to launder Bitcoin. It works by allowing certain miners to process transaction fees but it can also be used to start a whole new industry around exclusive mining. The researchers at the Blockchain Research Lab in Hamburg outlined a new way to launder money by Exclusive mining.
Exclusive mining, according to the paper by Dr. Elias Strehele of the Blockchain Research Lab and Lennar Ante of the University of Hamburg, works if someone places transactions through a private channel and gives a single miner or a pool the exclusive right to confirm the transaction and earn some crypto as a reward. These are added to the blockchain like a normal transaction.
However, this is not the same from what usually happens meaning that if someone makes a BTC transfer, everyone on the network can try to mine and earn a reward of Bitcoin. Strehle said that he was not the first one to come up with the idea but that his research is the first time it was actually described. So, imagine you are on the darknet and need to launder your millions of BTC. You can send some BTC to an exclusive miner and get that miner to charge a huge transaction fee.
The exclusive miners can then take the Bitcoin they received as a reward for processing the expensive transaction to the cryptocurrency exchange and exchange it for fiat currency. This looks legitimate since it’s income earner from BTC mining. Then the miner will give the fiat currency to the lead figure in the transaction so the money can then disappear. The researchers say that the exclusive mining is quite hard to detect and cannot be easily solved. CEO of CipherBlade Rich Sanders said:
“I have not come across [it].I’ve come across mining services as a laundering methodology, but it is FAR less technically complex—it’s more like a deposit to [mining pool] NiceHash, which, from a functional perspective, will be equivalent to a deposit at an exchanger (trading one coin for another for chain-hopping). This isn’t going to be a route, say, a divorcee is going to use—at least, not now. It’s way too technical, so unless someone makes a turnkey solution, I doubt we’ll see much of it.”
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