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I received this good question recently:
I just read the October FFI and would appreciate/direct to Scripture, writings, or other source and explain HOW the blood of sinless, pure, and holy Blood of Jesus Christ REMOVES SIN?? What spiritual principle is effected by shedding of blood?... Other than just say Law required it, HOW is sin removed by shed blood?
Strictly speaking, the blood of Christ CLEANSES us from all sin. We should not say that the blood of Christ REMOVES sin. There is a difference, which explains the biblical terminology used.
The two works of Christ have two purposes: to overcome death and to overcome sin. The two doves are types to show how to overcome death. The two goats are types to show how to overcome sin.
Your question involves the latter, dealing with the removal of sin, so I'll focus there.
The first goat was killed, and the second released into the wilderness (Lev. 16). Both are types of Christ. The first time Christ came was to die; the second is a living work.
The first goat "atoned" for sin--that is, kaphar means "to cover." It did not remove sin. It merely CLEANSED us from sin. It was a ritual cleansing that was a legal act pronouncing something to be so, such as a legal verdict. I'll explain in a moment.
The second goat removes sin. It was pictured in the goat being led into a place not inhabited, carrying all of our sin, iniquity, transgressions, etc. to a place apart from mankind, i.e., the wilderness.
Thus, the first work of Christ on cross covered our sin, and gave us an IMPUTED righteousness. It did not remove sin, but God calls what is not as though it were (Rom. 4:17). We were given a legal verdict by which we were CLEANSED--that is, our criminal record was EXPUNGED, or cleansed.
The second goat portrays Christ REMOVING our sin, and this requires the second coming of Christ.
The first goat made it possible for Christ to indwell us as His temple. In the second coming, He comes forth from His Temple (our body), bearing also all of our sin, transgression, and iniquity to a place not inhabited. This is part of the event called "the manifestation of the sons of God." It is where Christ is manifested in us, and at the same time He removes all sin and iniquity from us.
I might also add that there is a difference between transgressions and iniquity. In Isaiah 53:5, "He was wounded for our transgressions; he was bruised for our iniquities." A wound is on the outside; a bruise is an inner wound. And so, Jesus wounds on the cross were for our transgressions, but He was also bruised for our iniquities, because a bruise is internal.
Iniquity is an inner condition and provides the motive for sin. Jesus deals with both of these, as pictured in the law and the prophets.