Cryptocurrency is being used by criminals, drug dealers, and even the Chinese government to launder money, according to a report by the New York Times.
The paper reported on an investigation by the NYT and The Guardian into how criminals and others are using the technology to evade taxes and launder the proceeds of crime.
The investigation focused on a Chinese man who, in March 2017, used the Bitcoin blockchain to transfer about $3.3 million to his personal account.
“Cryptocurrencies are like an art, but they are more like a science,” says Daniel Vavrus, who headed the NYT/Guardian investigation.
“You have to be very careful about using it.”
Bitcoin is a decentralized digital currency, with no central authority.
Instead, its users are collectively “mining” a digital currency for the purpose of storing and using it.
The currency is created through a process called “mining,” in which a computer “hashes” data on a network of computers.
This process requires a network to be connected to the Internet to run, so that each node can verify transactions.
In the process, a computer’s hash power is used to “mine” bitcoins.
Once a hash is found, it is then stored in a digital file called a “block.”
The file is digitally signed by the person who created it.
These files are “seeded” by computer chips to create a new block, which is then downloaded from the network of nodes.
Each new block can contain transactions, which are created by adding together the hashes of all previous blocks.
These transactions are then added to the current block to form a “chain.”
When the chain is complete, the block is known as a “mining block.”
This process is known collectively as “mining.”
The process requires computers to validate transactions, verifying that the data in the block matches the data that was previously uploaded to the network.
The process is called “proof-of-work,” and it requires a computer to run multiple computer nodes that validate the blocks to confirm that the hashes match.
Once the hashes have been verified, the next step is to transfer the bitcoins to the account of the person sending them.
“It’s like a lottery, with the miner taking the money,” Vavros said.
“The person is basically giving the miner the chance to win the money, if he’s smart enough.”
The man in question, named Guo Zhanghui, had used the cryptocurrency to send money to his own personal account, the Times reported.
He then transferred the money to a personal bank account, where it was deposited into an account held by a company called China UnionPay.
Guo used China Union Pay to send the money back to his account.
He did so using a different account.
Afterward, he transferred the funds back to China Union, and transferred the remaining $3,300 from the account he used to buy the cryptocurrency.
He later transferred the Bitcoin to his other personal account for another $3 million, and then deposited the rest of the money into a bank account held in the name of a Chinese company.
Vavsus told The Guardian that the “Chinese government has been using Bitcoin as a way to laundry money.”
This, the newspaper reported, has “given them the ability to move money around in a very clever way, and they can do this without having to go through any of the other banks that are doing it.”
The NYT/GUO report also detailed how Guo transferred $1.6 million from the Chinese bank account he had used to make the payments to his new account in a U.S. bank, the Chinese Central Bank, for a transfer amount of about $5 million.
China Union paid the funds to Guo’s personal account at the end of April.
After the money was transferred, Guo tried to withdraw it.
However, he failed to transfer his account into an escrow account.
The Times also reported that Guo is the owner of a website called Guo.com, which appears to be run by China Union.
This site lists Guo as the owner and sole owner of the company.
The website was first mentioned in a July 2016 article in the New Yorker magazine.
Gui’s website, The Bitcoin Investor, features a photo of a computer with the message, “You are a millionaire.”
The photo of the computer with “Millionaire” written on it was taken in 2016, before Guo launched his Bitcoin Investment Trust.
Guos company, China Unionpay, was registered in the Cayman Islands in March 2016, according the NY Times.
A spokesman for China Union did not immediately respond to a request for comment on the allegations.