You must all have heard of Bitcoin (BTC), Ethereum (ETH) and Litecoin (LTC). As their technology progresses towards success, financial criminals are discovering different new ways to profit from it through money laundering. The crypto has come a long way to completely match traditional financial channels in terms of volume when it comes to price redemption. For this reason, it becomes one of the easiest ways for a criminal to collect, store and clear the proceeds of crime every day. There are many areas where criminals use these digital currencies due to lack of control and regulation. There are many examples where criminals use crypto for black money using different techniques. Although there are still some regulations to be discussed, the economic changes can already be noticed by people according to Brexit Millionaire .
As criminals generally adapt quickly to technological advances with financial transactions such as crypto, financial institutions and regulators need to be more proactive in combating abuses of any kind. All regulators should focus their attention on creating effective regulations related to the crypto space as well as promoting the use of technology for the thorough detection of any type of crime. In the meantime, these new transaction methods should give financial institutions time to develop technology to prevent money laundering.
A global problem
Crypto, including BTC, can make it easier for criminals to hide the source of criminal income and move completely illegal money across borders without any identity. As seen in recent reports, crypto is increasingly being used by almost every criminal in the world to launder money. Recently, some cases have been reported. Let’s see
In the UK, an in-depth money laundering investigation has resulted in the largest seizure of crypto assets ever. Around £114 million worth of crypto assets have been seized as part of an investigation into money laundering crimes by specialist detectives from the London Metropolitan Police Economic Crime Command. What turned out to be the largest seizure in the country. Over 1,100 suspects have been arrested by China while investigating crypto money laundering. China’s Ministry of Public Security, its law enforcement agency, has arrested more than 1,100 people suspected of using crypto to launder illegal income through internet and phone scams.
In Hong Kong, a planned crypto money laundering scheme of up to $1.2 billion was also foiled. On July 15, Hong Kong Customs said it had arrested about four people for an alleged money laundering syndicate. Various local bank accounts were opened by these four people and every transaction was made through crypto exchanges.
If we use cryptography to transact
Talking about its use, it has many advantages as well as many disadvantages. Generally speaking, criminals use all these loopholes for their profiteering and fraudulent activities. The Clearing Association of China and Payments had previously announced that crypto “has become an important and easy channel for cross-border money laundering” because it is breathtaking, anonymous, global in nature and very convenient to deal with. Below are some of the key factors that make cryptocurrencies attractive for money laundering.
Lack of regulation:
If we talk about the traditional financial channel, it is highly legal and regulated and more protected in the world. For this reason, there are many countries where cryptography is discouraged. This lack of regulation and universal protection may also have made it attractive as an effective means of cleaning up illegal income for criminals.
Anonymity or pseudonym:
With the relative anonymity of each crypto transaction, many money laundering operations have been made possible. There are many crypto exchanges and wallet providers available that offer services with minimal anti-money laundering or know-your-customer rules.