Man
Professional
- Messages
- 3,054
- Reaction score
- 579
- Points
- 113
Hello, people. And today, for those who are out of the loop, I will tell you a little about money laundering through cryptocurrency.
Money laundering through cryptocurrency is a situation that causes headaches for law enforcement officials. The anonymity of the industry makes it extremely difficult to track financial flows in cryptocurrency.
The concept of "money laundering" was introduced by the famous American gangster Al Capone. A whole network of laundries was used to legalize money obtained through criminal means.
But we don't live in Chicago during the Prohibition era, we live in the 21st century. And in our time, one of the most popular "laundries" for money laundering, unfortunately, has become the crypto industry.
Over the past two years, criminals have laundered approximately $1.5 billion using cryptocurrencies, the FBI has found.
It should be understood that this is a very approximate amount, since it is almost impossible to establish an exact figure.
In terms of traditional finance, this looks like using dirty money to buy some fairly expensive asset. Most often, real estate is used for this purpose.
Through a long chain of shell companies, such real estate is resold a large number of times, which makes it very difficult to identify the real buyer. This scheme has been successfully transferred to digital assets.
The "dirty" money is used to buy cryptocurrency. Then, using specialized mixing services - a digital analogue of those very same Al Capone laundries, the acquired cryptocurrency is divided into many parts, which are converted into other available tokens.
Thus, a large cryptocurrency flow is divided into a huge number of "streams" that pass through hundreds and thousands of addresses. Naturally, determining the real owner in this case is more than problematic.
Such mixers allow mixing fairly large volumes of cryptocurrencies. For example, the description of one of the service states: "The *service* reserves are large enough to allow the system to mix even huge amounts without any risk."
The service is not free, of course. The mixer's commission is about 1-3%. Advertising of cryptocurrency mixing services can often be found on large sites on the Internet, so, apparently, they have no problems with clients.
The scheme is simple. Cryptocurrency is deposited into the cryptocasino account, 1-2 modest bets are made, after which the money is withdrawn. To speed up the process, you can't even make bets.
This method is quite popular for laundering stolen cryptocurrency, as it allows you to cover your tracks very quickly, especially since such gambling services do not involve any verification.
However, the FATF failed to meet the deadline, and the announcement of specific methods for combating money laundering through cryptocurrencies was postponed until the next G20 meeting.
So far, there is no effective and clear mechanism to combat this type of financial crime. At the moment, there are several precedents related to crypto exchanges, but they have not led to large fines or criminal cases.
The problem is that those in power simply don't know how to deal with it.
The only segment where some effective control is possible is the transition from fiat money to cryptocurrencies. Only at this juncture can the authorities apply some regulatory restrictions.
From a technical point of view, it is almost impossible to influence money laundering through crypto. Yes, large exchanges operate within the scope of KYC and AML laws, but when money is deposited into their accounts from mixer sites, they are completely ineffective. Note that we are talking about large official platforms. What to do with decentralized cryptocurrency exchanges in this case, no one knows at all.
In all likelihood, old methods that have proven themselves effective in the fight against money laundering will not produce any results in the case of cryptocurrencies until modern methods based on high technology are developed.
In the following articles, we will analyze the main methods of money laundering through crypto, naturally, all for informational purposes.
Money laundering through cryptocurrency is a situation that causes headaches for law enforcement officials. The anonymity of the industry makes it extremely difficult to track financial flows in cryptocurrency.
The concept of "money laundering" was introduced by the famous American gangster Al Capone. A whole network of laundries was used to legalize money obtained through criminal means.
But we don't live in Chicago during the Prohibition era, we live in the 21st century. And in our time, one of the most popular "laundries" for money laundering, unfortunately, has become the crypto industry.
Over the past two years, criminals have laundered approximately $1.5 billion using cryptocurrencies, the FBI has found.
It should be understood that this is a very approximate amount, since it is almost impossible to establish an exact figure.
Cryptocurrency Mixing Services
One of the most popular methods for money laundering is the so-called layering.In terms of traditional finance, this looks like using dirty money to buy some fairly expensive asset. Most often, real estate is used for this purpose.
Through a long chain of shell companies, such real estate is resold a large number of times, which makes it very difficult to identify the real buyer. This scheme has been successfully transferred to digital assets.
The "dirty" money is used to buy cryptocurrency. Then, using specialized mixing services - a digital analogue of those very same Al Capone laundries, the acquired cryptocurrency is divided into many parts, which are converted into other available tokens.
Thus, a large cryptocurrency flow is divided into a huge number of "streams" that pass through hundreds and thousands of addresses. Naturally, determining the real owner in this case is more than problematic.
Bitcoin Mixer Sites
One of the laws of macroeconomic theory states that demand creates supply. This is reflected in the emergence of many mixer services. Moreover, these sites do not hide from anyone, access to them is not blocked, no one interferes with their work.Such mixers allow mixing fairly large volumes of cryptocurrencies. For example, the description of one of the service states: "The *service* reserves are large enough to allow the system to mix even huge amounts without any risk."
The service is not free, of course. The mixer's commission is about 1-3%. Advertising of cryptocurrency mixing services can often be found on large sites on the Internet, so, apparently, they have no problems with clients.
Crypto casinos and other online games
Another popular method for criminals to launder dirty money is the online gaming industry. Fortunately, there is no shortage of crypto casinos and other gaming services.The scheme is simple. Cryptocurrency is deposited into the cryptocasino account, 1-2 modest bets are made, after which the money is withdrawn. To speed up the process, you can't even make bets.
This method is quite popular for laundering stolen cryptocurrency, as it allows you to cover your tracks very quickly, especially since such gambling services do not involve any verification.
The effectiveness of combating money laundering through cryptocurrencies
The problem of money laundering using cryptocurrencies quickly reached international proportions. At the initiative of Japan, the development of measures was entrusted to the FATF (Financial Action Task Force). A specific plan was to be presented at the G20 summit.However, the FATF failed to meet the deadline, and the announcement of specific methods for combating money laundering through cryptocurrencies was postponed until the next G20 meeting.
So far, there is no effective and clear mechanism to combat this type of financial crime. At the moment, there are several precedents related to crypto exchanges, but they have not led to large fines or criminal cases.
The problem is that those in power simply don't know how to deal with it.
The only segment where some effective control is possible is the transition from fiat money to cryptocurrencies. Only at this juncture can the authorities apply some regulatory restrictions.
From a technical point of view, it is almost impossible to influence money laundering through crypto. Yes, large exchanges operate within the scope of KYC and AML laws, but when money is deposited into their accounts from mixer sites, they are completely ineffective. Note that we are talking about large official platforms. What to do with decentralized cryptocurrency exchanges in this case, no one knows at all.
In all likelihood, old methods that have proven themselves effective in the fight against money laundering will not produce any results in the case of cryptocurrencies until modern methods based on high technology are developed.
In the following articles, we will analyze the main methods of money laundering through crypto, naturally, all for informational purposes.
