Crowdfunding Laundering: How Dream Platforms Became a Conveyor Belt for Legalizing Dirty Digital Money

[Professor]

Using legitimate crowdfunding platforms (Kickstarter, Patreon) for money laundering and cashing out​

Crowdfunding (Kickstarter, Indiegogo) and subscription platforms (Patreon, Boosty), with their liberal policies, high turnover, and culture of trust, have become, in 2024-2026, an ideal, albeit risky, tool for laundering (blending) and cashing out criminal proceeds. This is not a mass scheme, but a targeted method for laundering relatively small amounts ($10,000-$100,000) while creating a plausible digital legend.

The gist of the scheme: Converting "dirty" money into "honest" donations or subscriptions​

The goal: Not to steal money from backers (although that happens), but to carry out the opposite operation: deposit criminal funds onto the platform and withdraw them as "legal" profit for the project or content creator.

Scheme 1: Fake crowdfunding project (Kickstarter/Indiegogo)​

• Preparation:
  1. A credible image of the creator is created : Fake social networks, a business card website, perhaps even 3D models or a prototype assembled from ready-made parts.
  2. A beautiful, detailed project on a popular topic (an eco-friendly gadget, a board game, a tech accessory) is launched. It's important to create the appearance of activity.
• Introduction of "dirty" money:
  1. The main stage: Criminal funds (most often cryptocurrency, less often cash through front men) are converted into legal means of payment (bank cards of virtual/front men, PayPal accounts).
  2. Large "contributions" to the project are made through a network of controlled accounts ("puppets"), simulating a successful fundraising effort. For example, 80% of the $50,000 raised could be "injected" by the scammers themselves.
• Legalization and withdrawal:
  1. The platform (after deducting a commission) transfers the funds to the project creator's bank account, opened under a fictitious but well-registered legal entity or individual.
  2. Key stage: The project "fails" (apologies, "technical difficulties," "underestimated the difficulty"). According to the rules of most platforms, if the goal is not reached, the money is returned to backers. But! If the goal is reached, there are usually no refunds. In the event of "failure," the scammer can return part of the funds to other controlled accounts, faking refunds, and legally keep the rest to "compensate expenses."
  3. Ideal outcome: The project is supposedly "launched," a minimal batch of cheap goods is produced (or simply "thank you" letters are sent out), creating the appearance of fulfilling obligations. The bulk of the funds are withdrawn as "revenue" from sales.

Risks: Platforms have anti-fraud departments. An unusually high percentage of large donations, a surge in traffic from one region, or suspicious backer accounts can all trigger an investigation and the freezing of funds.

Scheme 2: Abuse of subscription platforms (Patreon, Boosty, DonationAlerts)​

A more flexible and less risky scheme, ideal for regular laundering of medium amounts.

• Preparation: A content project (blog, YouTube channel, stream, "exclusive club") is created with minimal, but existing content. It's important to appear authentic.
• Implementation and legalization:
  1. Through controlled accounts, dozens of "subscriptions" are issued for high tiers (for example, $50-$500 per month).
  2. Money is deposited regularly (monthly) into the creator's account from the platform as "subscriber income". This appears to be legitimate income from content.
  3. Crypto -> Fiat: The original criminal funds in crypto are exchanged for fiat via P2P or crypto banks and used to pay for these "subscriptions".
• Advantages:
  • Regular, predictable "white" cash flow.
  • The "creator" legend easily explains income to the bank or tax authorities.
  • Easier to hide a fake: It's harder to spot the difference between bot subscribers and real ones on these platforms than it is to spot mass fakes on Kickstarter.

Scheme 3: "Washing" through stream donations and charity​

• Using platforms like DonationAlerts and Streamlabs: Criminal funds are transferred in the form of mass donations (donation storms) to a controlled or contracted streamer channel.
• The streamer (or accomplice or the scammer themselves) receives money (minus the platform's commission) as donations for the content. The money can then be split.
• A variation—fictitious charitable collections: Creating a fake NGO or raising money to "help children or animals." Criminal funds are injected as "donations" and then withdrawn under the guise of "help expenses" (rent, purchasing goods from shell companies).

Why does this work? Platform vulnerabilities​

1. A culture of trust and minimal KYC: Creating a project or channel does not require extensive verification. The primary verification is the recipient's solvency and bank account history, not the source of the donor's funds.
2. Difficulty in tracking the final donor: The platform sees that the money came from cards/PayPal, but cannot easily determine where the funds came from.
3. Explainable patterns: Large and frequent fan donations are part of the culture. This helps conceal fakes against the backdrop of possible real payments.
4. Lack of clear red flags for small amounts: Platform anti-fraud systems are designed to detect mass fraud against backers (carding to collect funds), and not complex money laundering schemes through incoming payments.

Risks for fraudsters​

• Internal platform audit: Kickstarter and Patreon have security departments that collaborate with banks. Unusually high activity from new accounts, matching IP addresses, and geolocations of donors and creators are grounds for blocking.
• Tax authorities: Regular deposits into an individual's account without any real content or audience will raise questions. These amounts must be reported and taxes paid, which creates a paper trail.
• Bank control (AML): A bank, seeing regular payments from Patreon/Kickstarter to an individual entrepreneur's or private individual's account, may request proof of activity (contracts, reports). An unprepared cover story will fall apart.
• Competition and attention: A successful but "empty" project may attract the attention of journalists or enthusiasts, leading to exposure.

Conclusion: A niche but growing channel for digital laundry workers​

Crowdfunding and crowdfunding platforms are not the primary, but valuable, tool in a money launderer's arsenal. They allow:

1. Create a digital legend of legal income.
2. "Dilute" dirty money with flows from real users (if any).
3. Receive formally clean funds into a bank account, from which you can pay taxes and live legally.

This presents a dilemma for platforms : stricter checks kill the spirit of openness and accessibility, while weak oversight makes them attractive to criminals. In the future, we can expect the introduction of AML-like procedures for large creators and projects, which will push money launderers toward new, more decentralized methods (NFTs, social tokens). The war for the purity of "dream money" is just beginning, and its outcome will determine whether these platforms remain a space for creativity or become yet another regulated financial institution.