A cryptocurrency payment can begin in a bank account, pass through a public blockchain and end as money in another bank account. Understanding that journey helps explain both everyday crypto payments and financial-crime investigations.
The essential distinction is between the movement of assets, the ability to control them and the identity of the people involved. A blockchain can provide evidence of the first two without automatically establishing the third.
What is a blockchain?
A blockchain is a shared digital record maintained across a network of computers. Transactions are grouped into blocks, which are linked using cryptography. Participants check new transactions and blocks against the network’s rules.
On Bitcoin, this record allows the network to verify whether funds can be spent and lets wallet software calculate a balance. Digital signatures authorise transactions, while a process called mining helps the network agree on their order. Altering an earlier block would disrupt the links to the blocks that follow it, making settled history difficult to rewrite. Bitcoin.org’s explanation
A useful comparison is a shared transaction book with rules for adding entries. It does not, by itself, explain the commercial reason for a payment or certify that the people involved are acting lawfully.
Cryptocurrency is the asset; the blockchain is the recording system. Bitcoin’s native asset is bitcoin, usually abbreviated BTC. Ethereum has a native asset called ether, or ETH, and also runs programs called smart contracts. These programs execute coded instructions when users interact with them, enabling applications beyond straightforward payments. The distinction is one of scope: Ethereum is designed as a general-purpose programmable network. Ethereum’s smart-contract documentation
What is a crypto wallet actually holding?
The word “wallet” can blur several different things:
| Term | Plain-English meaning |
|---|---|
| Wallet interface | An app, browser tool or device used to view balances and arrange transactions. |
| Blockchain address | An identifier used when receiving assets or interacting with the network. It is not automatically a verified personal identity. |
| Private key | Secret cryptographic data used to sign transactions in a basic key-controlled account. It is different from an app password. |
| Custody | The arrangement determining who controls the keys or other mechanisms needed to authorise transactions. |
| Self-custody | The user controls those credentials and takes responsibility for securing access. With a custodial service, a provider manages that control for the user. |
The asset records are on the blockchain. A wallet provides the means to interact with them; it is not a container of digital coins sitting inside a phone. Ethereum’s wallet guide distinguishes the interface, account, address and keys, and explains the different reliance placed on a centralised exchange. Ethereum wallet guide
There is a further distinction for investigators: a provider’s customer account and the public blockchain are different records. Some transfers happen within a provider’s system. For example, Coinbase documents off-chain transfers between its users that do not appear on the blockchain. A complete account history may therefore require provider records as well as blockchain data. Coinbase’s sending guidance
How fiat money becomes crypto—and becomes fiat again
Fiat currencies are government-issued national currencies, such as dollars, pounds or rupees. Bank balances are denominated in these currencies. An on-ramp exchanges fiat money for crypto; an off-ramp exchanges crypto for fiat. Exchanges and payment services can provide these connections. Coinbase’s on-ramp and off-ramp explainer
A simplified payment journey looks like this:
Fiat payment → crypto purchase → blockchain transfer → recipient → crypto sale → fiat payout
In practice:
- Purchase: A customer pays a service using a supported bank or card method and buys crypto. The service may initially show the purchase in a custodial account.
- Transfer: Crypto can then be sent over the relevant blockchain to a recipient’s address. This creates an on-chain transaction record.
- Conversion: The recipient may keep the crypto or use an off-ramp to sell it and receive fiat money through an available payout method.
These are separate events. Buying crypto inside an exchange and making a blockchain transfer are not necessarily the same step.
A merchant payment can add another intermediary. BitPay, for example, offers businesses settlement in fiat to a bank account, crypto, or a combination. A customer paying in crypto does not establish that the merchant ultimately holds crypto. BitPay’s business payment description
This is an explanation of the flow, not an investment recommendation. Access depends on local law, provider eligibility, supported assets and networks, banking arrangements and service terms. A payment option advertised online does not establish that it is lawful or available in every country.
Is cryptocurrency anonymous?
Ordinary activity on public networks such as Bitcoin and Ethereum is usually better described as pseudonymous. Activity is associated with addresses rather than automatically accompanied by a person’s legal name.
On these networks, observers can generally inspect transaction identifiers, addresses, amounts and block timing. Ethereum activity can also reveal interactions with smart contracts. Patterns may expose connections and sensitive financial information, even when the ledger contains no verified name. Privacy-enhancing systems can change what is visible, so this description should not be extended to every cryptoasset or application. Ethereum’s explanation of public-chain privacy
Connecting an address to a particular person requires additional evidence. In the Bitcoin Fog investigation discussed below, the evidence included blockchain analysis alongside account-login and internet-protocol information. D.C. Circuit opinion, sections I and II.C
LearnAML analysis: A transaction record, an analytical label and a verified identity answer different questions. An address may belong to a service rather than its underlying customer. Analysts should record how an attribution was established, what assumptions it uses and what evidence could contradict it.
Privacy is also a legitimate interest. People and businesses may want to protect salaries, commercial relationships or personal safety. Seeking financial privacy does not, by itself, establish criminal conduct.
What makes crypto activity more accountable?
Accountability comes from combining technical records with responsible service providers and effective oversight.
The Financial Action Task Force (FATF), the international standard setter for anti-money laundering and counter-terrorist financing, calls for countries to license or register virtual asset service providers and supervise them. Its framework also covers:
- Customer due diligence: identifying and verifying customers and understanding relevant risks.
- Record keeping: retaining information that supports later review and investigation.
- Suspicious transaction reporting: reporting suspicions through the applicable national system.
- The Travel Rule: obtaining, holding and securely transmitting required information about the originator and beneficiary of covered transfers.
These standards rely on national implementation; they are not a single identical rulebook operating everywhere. Travel Rule information should be exchanged securely through appropriate arrangements, rather than treated as a reason to put personal identity documents on a public blockchain. FATF’s virtual-assets overview
Sanctions controls add another layer. The U.S. Treasury’s Office of Foreign Assets Control (OFAC) recommends risk-based controls that can include customer and geographic screening, transaction monitoring and blockchain analysis. Its guidance explains that U.S. sanctions obligations also apply to virtual-currency transactions where the relevant jurisdictional requirements are met. OFAC’s virtual-currency industry guidance
Blockchain analysis can help identify transaction paths and group addresses thought to share control. Its outputs still depend on methods, assumptions and supporting intelligence. In Sterlingov’s appeal, the court upheld admission of the expert evidence under the applicable evidentiary standard. That case-specific decision should not be treated as a guarantee that every analytical label is correct. D.C. Circuit opinion, section II.C
LearnAML analysis: Compliance teams should preserve transaction identifiers, distinguish direct observations from inferred links, document uncertainty and seek corroboration before drawing conclusions about identity or criminal purpose.
What does a crypto mixer do?
A mixer, sometimes called a tumbler, complicates the connection between incoming and outgoing crypto. In a pooled service, funds from different users are combined and payments are made out of that pool. The public record may show transactions into and out of the service without providing a straightforward one-to-one link between a particular deposit and withdrawal. D.C. Circuit opinion, section I
Mixing does not erase the blockchain or guarantee that attribution is impossible. Its legal significance depends on the service, conduct, knowledge, applicable obligations and jurisdiction. A compliance review should examine that context.
Bitcoin Fog: what Roman Sterlingov was convicted of
Bitcoin Fog illustrates why the legal findings matter more than a general description such as “making crypto anonymous.”
On 12 March 2024, a jury convicted operator Roman Sterlingov following a month-long trial. On 8 November 2024, he was sentenced to 150 months—12 years and six months—in prison. U.S. Attorney’s Office sentencing release
The four convictions were:
- Conspiracy to commit money laundering, under 18 U.S.C. § 1956(h).
- Substantive money laundering involving property represented to be criminal proceeds—the sting provision in 18 U.S.C. § 1956(a)(3)(A) and (B).
- Operating an unlicensed money transmitting business, under 18 U.S.C. § 1960(a).
- Conducting money transmission without a licence, under D.C. Code § 26-1023(c).
On 25 September 2026, the U.S. Court of Appeals for the D.C. Circuit affirmed the convictions and sentence. The convictions and sentence therefore stood following that appeal. Court opinion, opening and conclusion
The U.S. Department of Justice reported that Bitcoin Fog processed more than 1.2 million BTC, valued at approximately $400 million when the transactions occurred, during its 2011–2021 operation. That is a historical transaction valuation, not a current bitcoin valuation. DOJ sentencing announcement
The roughly $400 million figure also needs care: the appellate court upheld the sentencing treatment of commingled funds under the relevant Guidelines rule. It should not be described as a separately identified underlying crime for every payment. Court opinion, section II.I
The evidence went beyond the existence of privacy technology. The sentencing release describes promotion to people seeking to evade law enforcement, transactions with darknet markets and an undercover operation in which funds were represented as proceeds of drug sales. U.S. Attorney’s Office account of the evidence
LearnAML analysis: The case demonstrates how blockchain evidence, service records and surrounding conduct can be considered together. Its lesson is to examine the proved offences and evidence carefully, while avoiding an inference that privacy alone establishes laundering.
For the full evidence, legal findings and a fictional review exercise, read the Bitcoin Fog Case File: what Roman Sterlingov was convicted of.
Which businesses accept crypto payments?
The following are verified examples, not a ranking by size or market share. “Accepts crypto” can describe several different arrangements.
| Business or platform | What the official source supports | Relevant limits |
|---|---|---|
| AMC Theatres | Its U.S. website advertises BitPay payments for tickets, food and drinks using assets including bitcoin and ether. | The advertised route is AMC’s website or app. It does not establish crypto acceptance at an in-theatre till or across every international AMC-branded business. AMC payment page |
| Newegg | The retailer offers crypto payment through BitPay for eligible orders. | Desktop website only, excluding its mobile app. Restrictions include Marketplace items, subscriptions, pre-orders and gift cards. Its international list includes the UK, UAE and Singapore, among specified markets; support is not universal. Newegg payment methods |
| Travala | The travel booking business lists crypto payment options including BTC and ETH. | Payments are made through Travala’s booking arrangements; this does not establish direct crypto acceptance by each hotel or airline. Its terms exclude customers connected to defined prohibited jurisdictions and say payment methods may differ between website, app and concierge channels. Payment options, terms, clauses 2.3 and 8.2 |
| Participating Shopify merchants | Shopify enables eligible merchants to offer USDC, a dollar-linked stablecoin, through Shopify Payments. Shopify is the enabling platform. | Merchant activation and regional eligibility apply. The U.S. eligibility list excludes Alaska, New York and Texas; subscriptions are excluded. Customers need USDC on a supported network. Merchants can receive local-currency payouts, with USDC payouts available in some regions. Shopify USDC documentation |
An indirect gift-card arrangement is different again: a customer buys a retailer’s gift card from a separate seller using crypto, then spends that gift card at the retailer. The retailer receives the gift-card payment. That arrangement alone is not evidence that the retailer offers crypto checkout.
For compliance professionals, the useful question is where each participant sits in the payment chain: who takes the customer’s crypto, who converts it, who receives the settlement and which records connect those steps?