As the value of cryptocurrencies has skyrocketed, so too has their use for illegitimate purposes. While Bitcoin’s reputation as an anonymous form of money is well deserved, criminals have discovered ways to exploit this feature to launder funds and conceal illegal activities. Cryptocurrency exchanges, mixers, and other centralized services have seen a significant increase in money laundering activity in 2021, according to blockchain analysis firm Chainalysis. While the majority of these transactions occur on exchanges, many criminals also choose to launder their cryptocurrencies through other centralized services. Mixers are a popular choice, and this is not without reason: they offer anonymity and the ability to combine an individual’s wallet with those of other users in order to eliminate the risk of being tracked.
One of the most common ways to launder cryptocurrency is by converting it to cash. This can be done through ATM withdrawals, teller services, and other reputable sources. In addition, it is possible to convert cryptocurrency into a variety of other currencies, such as the dollar or the euro. This can be done through online currency conversion services that allow you to input the amount of money you want to transfer and then process it for you. These services are typically safe, but they can be more vulnerable to fraud than other types of money transfers.
Other methods of 비트코인세탁 laundering crypto include the use of prepaid debit cards. These cards are loaded with Bitcoin and then used for a variety of illicit purposes, such as purchasing drugs or weapons, or paying for ransomware. Criminals can also deposit their cryptocurrencies into local bank accounts that are then transferred to money mules who can spend them on their own or for other criminal purposes. This is a more effective way of laundering large amounts of money, but it can still be dangerous as criminals are often unwilling to disclose the true identity of their money mules.
Another method is to send digital assets across blockchains, which makes it harder for law enforcement agencies to trace transactions. These transfers are made using cross-chain bridges, such as RenBridge, which has been linked to $540 million in crime-related crypto cash in 2020, according to blockchain analytics company Elliptic. The majority of these dollars came from ransomware, with the rest coming from theft and other types of cybercrime.
Cryptocurrency laundering can be difficult for MSBs to monitor, but it is not impossible. New tools allow them to match customer data with transaction histories, making it easier for them to identify high-risk customers and remain AML compliant. Ultimately, these tools can be an effective tool for stopping criminals in their tracks and reducing the amount of money they are able to launder. Nyman Gibson Miralis offers expert advice and representation in all aspects of digital currency, encryption, and money laundering laws. Contact us today for more information.
