Where money is, there is always a crime related to it. It has eternally been used by malicious individuals for various illicit purposes including terrorism supply, purchase of illegal items as well as money laundering.
As per estimations, provided by the United Nations Office on Drugs and Crime, every year around $800 billion – $2 trillion which make up 2-5% of the world’s GDP, are laundered, The Economist reports.
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Vicious fellows have been using different ways of washing dirty funds. To take a handful of examples: they exchanged the money for ores, misstated invoices, laundered cash with the help of gaming houses or brought money with them and traveled to places where banks are not meticulous.
With the advent of cyber money, nothing has really changed besides the increase of the amounts rinsed and the cut of the time needed for that.
Cryptos Upgrade Money-Laundering Stuff
The mentioned above data concerning the scope of money laundering illustrates how small that fraction is. However, uncomplicated are the lures of crypto-coins, and their further popularity may boost the washing. Among these lures there are:
- worldwide availability
- irreversibility of transactions
- ability to make users anonymous
The head of Europol (the police agency of Europe) Rob Wainwright believes with the crypto-rage things will get worse. According to his words, every year from $4.2 billion to $5.6 billion are rinsed through cryptos – and that is 3-4% out of Europe’s yearly unlawful takings.
America’s Drug Enforcement Administration, in its turn, believes that the gauge of the crypto-use is greater when it comes to international gangs.
The Economist points out that dirty fiat (cash) can be rinsed by converting it into cyber money. Drug dealers, for instance, will split the earnings into smaller amounts and move it through the crypto-ecosystem, probably, even through several digital coins and wallets.
Dirty cyber money, let’s say from a ransomware attack, can also be easily cashed out. Criminals usually swap them around at high speed (what is called “atomic swaps) as well as in little amounts (“micro-laundering”). Apparently, they almost never convert large sums because it can make them vulnerable – it is not difficult to notice such remittances.
Despite the scope, authorities are step-by-step trying to deal with the issue. In March, for example, a Brit was imprisoned in the Netherlands for taking $13.2 million in dirty BTC units from criminals. According to reports, after taking the money, he converted it into fiat via his bank account, withdrew the cash and gave it back to rascals, getting a fraction for the work completed.
Nevertheless, high-class money-launderers use much more complex ways. Michael McGuire of Surrey University says they even combine old and new methods to dodge disclosure.
For instance, not long ago Europol detected how European criminal power brokers paid Colombian drug cartels for cocaine with cyber-coins. Henchmen from Europe attended digital-money trading venues to convert EU public currency into anonymous cyber-coins.
These cryptos were sent to a wallet registered in Colombia and exchanged into pesos on an online crypto-bourse. Pesos, in their turn, were withdrawn in cash in such small amounts that the whole thing would seem unsuspicious. Previously, local “money mules” spread these funds among dozens of bank accounts, also to avoid detection. The cartel leaders, finally, received the money by cashing it out or electronically.
Despite anything, it is not cryptos which are the root of evil. McGuire says:
“Sticking £10,000 down your underpants and flying to Zurich is still quite a common and easy way to launder money.”
However, gov’ts should keep cryptos in mind, as if they try to stop money-laundering in the streets, the may fail to observe how crypto-laundering becomes the future.