Criminals Prefer Conventional Cash for Money Laundering – Not Cryptocurrency: SWIFT

Fiat is still the king when it comes to washing dirty money

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A brand-new report by the Society for Worldwide Interbank Financial Telecommunication (SWIFT) says cryptocurrency is rarely utilized for money laundering activities compared to fiat or other conventional techniques.

Despite the perception that cryptocurrencies are a favored sanctuary for unlawfully obtained funds, criminals prefer to wash proceeds through front companies, mules, or cash services along with investing it into criminal activity, it stated.

“Identified cases of laundering through cryptocurrencies remain fairly small compared to the volumes of cash laundered through conventional methods,” SWIFT reported, in a research study titled “Follow The Money”, released recently.

Money laundering remains a big problem for economies throughout the globe. According to the United Nation’s Office on Drugs and Crime, $800 billion to $2 trillion, or the equivalent of 2% to 5% of international GDP, is washed through traditional cash channels each year. But crypto-assets do not feature prominently.

The money laundering report, put together in cooperation with financial research company Bae Systems, takes a look at how criminals spin money through the monetary system to obscure its fraudulent ownership and origins before reintroducing it back into the legitimate economy.

Is Cryptocurrency Used To Launder Money?

SWIFT, a well known global interbank messaging company, said that while virtual or cryptocurrency accounts for fewer cases than fiat, a few of these are very prominent. In one of the highlighted cases, a cyber-crime group presumably converted money stolen from ATM cashouts into crypto assets.

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Another case included arrest and prosecution after authorities discovered 15,000 bitcoin (BTC), 2 sports cars, and precious jewelry worth $557,000 at the group leader’s home. The authors observed that privacy-centered digital currencies like Monero (XMR) or Zcash (ZEC) might in the future become appealing to criminals, saying:

The raft of alternative cryptocurrencies that provide greater privacy, along with services like tumblers and mixers that assist in obscuring the source of funds by mixing potentially identifiable cryptocurrency funds with big quantities of other funds, might increase the appeal of cryptocurrency for dubious purposes.

SWIFT discussed that online-thieves may seek to utilize crypto as a method for obfuscating and laundering the funds stolen during a cyber-heist, before making different purchases in order to integrate the money

“In these circumstances, cyber-criminals may launder the illegal funds at a bitcoin farm, before utilizing financial platforms to load pre-paid credit or debit cards with bitcoin,” stated the report.

bitcoin tumbler
The basics of a bitcoin tumbler

The alleged North Korea-connected Lazarus Group heist, involving the transfer of stolen funds across the crypto ecosystem, along with using Chinese facilitators to cash stolen crypto assets, offers insight into one of the techniques utilized. Prepaid cards connected to crypto wallets can also help with the reversion of stolen crypto back to fiat in small amounts.

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Another layering method includes transforming cryptocurrency into tangible properties. Per the report, “there are dedicated websites that help with the purchase of high-end property and land assets throughout the world, including tropical islands and high-end penthouses, along with precious jewelry, gold bars, watches, and fine arts.”

SWIFT notes concern within the monetary system, that peer-to-peer purchases on online markets for luxury properties help to keep ill-gotten wealth hidden.

What do you think about cryptocurrency and money laundering? Do please let us know in the comments below.

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  1. Criminals Prefer Conventional Cash for Money Laundering – Not Cryptocurrency: SWIFT – BTC MOX

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