You may be right but let me explain why I think Bitcoin actually works well in this example for money laundering. You have cash and you buy bitcoin. US bitcoin exchanges probably do kyc (know your customer = laws / forms you file saying you know where the money comes from) but many offshore exchanges supposedly do not.
You could take your bitcoin and sell it on an exchange as you suggest but there are two problems with this. First, it's not that easy to sell a lot of bitcoin for real USD and the transaction costs can get high. Second, and more importantly, as money launder what you really want to do is take your dirty money in one jurisdiction and take it to another. Did you ever see Blow? Based on a true story. A US guy raised incredible money selling cocaine and stored it in a shady Panama Bank. The bank steals his money. What his recourse? If you are an oligarch in a corrupt country you want to get your money somewhere your government can't seize it. So why not take your bit coin and use it to buy real estate in Dubai? If you took your bitcoin and sold it in a way that ends up in a western bank, that bank is going to do kyc and defeats the whole purpose.
Obviously I have never laundered money and I don't really know. Tell me I am crazy.
But to buy bitcoin on an exchange, even if it doesn't have KYC laws, you'd need to have the money in a bank account first to do the wire transfer to fund your crypto exchange account. The problem of money laundering is how do you get it into the bank account in the first place. What I'm saying is that you'd have to do actual cash transactions, meaning giving someone paper money and getting bitcoin into your wallet. That's quite a problem, especially as the numbers get larger.
There are plenty of HNW individuals who want to buy or sell crytpo for cash no questions asked. Just last week a Swiss guy wanted to buy 1.5 million EUR of bitcoin from me for cash at a 10% premium. He'd supposedly have the cash delivered anywhere in Europe.
Too risky for me, but if you're a drug cartel, that's business as usual.
You could take your bitcoin and sell it on an exchange as you suggest but there are two problems with this. First, it's not that easy to sell a lot of bitcoin for real USD and the transaction costs can get high. Second, and more importantly, as money launder what you really want to do is take your dirty money in one jurisdiction and take it to another. Did you ever see Blow? Based on a true story. A US guy raised incredible money selling cocaine and stored it in a shady Panama Bank. The bank steals his money. What his recourse? If you are an oligarch in a corrupt country you want to get your money somewhere your government can't seize it. So why not take your bit coin and use it to buy real estate in Dubai? If you took your bitcoin and sold it in a way that ends up in a western bank, that bank is going to do kyc and defeats the whole purpose.
Obviously I have never laundered money and I don't really know. Tell me I am crazy.