Bitcoin is a peer-to-peer electronic cash system that lets you send money from one person to another without going through a bank. Bitcoin has become popular with libertarians and techies for its lack of central authority and its ability to skirt government regulation. But in the last year, it's also become a hot target for criminals who want to use it as part of their illegal activity.
Earlier this month, police arrested two men in Germany who they say were using bitcoin to launder money and evade tax laws. One of them, a 31-year-old man named Matthias Gardocki, was sentenced on Wednesday to three years' probation and 150 hours of community service after being found guilty of tax evasion. The other man, named only as Peter S., received suspended jail time and was ordered to pay 10,000 euros ($11,000) in damages to the German state. According to prosecutors, the pair used their bitcoin accounts "to purchase luxury goods such as cars and motorcycles."
The case underscores the way criminals can turn any form of currency into their own personal piggy bank—and how even minor coinage transactions can add up to serious money if you're doing something illegal.