The U.S. Treasury's FinCEN [describes][1] money laundering as the process of making illegally-gained proceeds (i.e. "dirty money") appear legal (i.e. "clean").

Bitcoin is a pseudonymous digital currency but it can be used anonymously when certain precautions (using Tor, mixing, etc.) are taken.

Presumably, some or all of the money would get exchanged to fiat. That is the point at which identity is required. Most exchanges have AML policies that require identity verification for withdrawals when the limits as defined by law are reached.

So as long as the funds are kept as bitcoins, and transacted in a certain way, successful laundering of those funds might be possible.

Cash (currency) would probably more convenient to a money launderer though.

The U.S. Treasury's FinCEN describes money laundering as the process of making illegally-gained proceeds (i.e. "dirty money") appear legal (i.e. "clean").

Bitcoin is a pseudonymous digital currency but it can be used anonymously when certain precautions (using Tor, mixing, etc.) are taken.

Presumably, some or all of the money would get exchanged to fiat. That is the point at which identity is required. Most exchanges have AML policies that require identity verification for withdrawals when the limits as defined by law are reached.

So, as long as the funds are kept as bitcoins, and transacted in a certain way, successful laundering of those funds might be possible.

Cash (currency) would probably more convenient to a money launderer, though.