Research: Criminals target Bitcoin mining and launder money by cooperating with designated mining pools and miners

According to BlockBeats, researchers at the Blockchain Research Laboratory in Hamburg, Germany, recently proposed a new method for money laundering on the blockchain: "exclusive mining."

According to a paper published on Friday by Dr. Elias Strehle of the Blockchain Research Lab and Lennar Ante of the University of Hamburg, the exclusive mining method works like this: "Someone makes a transaction through a private channel and gives a single miner or mining pool the exclusive right to confirm the transaction and receive the cryptocurrency as a reward. These are added to the blockchain just like regular transactions."

This is different from what usually happens: if someone makes a Bitcoin transfer, everyone on the network can try to mine it to get their share of Bitcoin rewards.

Imagine a dark web drug tycoon who needs to launder millions of bitcoins. So this person needs to send some bitcoins to exclusive miners under his control, and then let these miners charge ridiculously high transaction fees.

The sole miner then exchanges the Bitcoin they earn from processing this expensive transaction to a cryptocurrency exchange and changes it to fiat currency. It looks legitimate because its income comes from Bitcoin mining. The sole miner then hands the fiat currency to the mafia boss.