Criminals still prefer cash over cryptocurrency when laundering money, says SWIFT report
When it comes to money laundering, cash is still the preferred asset of choice by criminals.
Fri, 11 Sep 2020, 10:54 am UTC
Cryptocurrency critics have long argued that digital currencies could be used by criminals to carry out their illegal activities. But a recent report by the world’s largest electronic payment network revealed that criminals still prefer to use cash instead of digital currencies when it comes to money laundering.
Regulators have always been worried about cryptocurrency due to the perception that criminals prefer to use crypto assets to launder illegally acquire funds. But a recent report released by SWIFT, or the Society for Worldwide Interbank Financial Telecommunication, revealed that digital currencies are seldom used for money laundering as compared to fiat, Bitcoin.com reported.
“Identified cases of laundering through cryptocurrencies remain relatively small compared to the volumes of cash laundered through traditional methods,” SWIFT wrote in the report titled “Follow The Money.”
UN’s Office on Drugs and Crime estimates that between $800 billion to $2 trillion, which is between 2 to 5 between percent of the world’s GDP, is laundered annually. However, SWIFT’s report revealed that the amount laundered with the use of cryptocurrency accounts only for a fraction of the total amount.
SWIFT collaborated with the financial research firm Bae Systems to come up with the money laundering report. They focused on how criminal syndicates spin illegally obtained funds through the financial system in an attempt to obfuscate their originals and pass them off as legitimately acquired wealth.
Compared to cases involving fiat, there were fewer crypto-related money laundering cases cited in SWIFT’s report. There was one case were a cybercrime group that converted stolen funds via ATM into cryptocurrency. In another case, authorities were able to recover 15,000 Bitcoin (BTC), $557,000 worth of jewelry, and two sports cars in the home of a leader of a crime group.
“The raft of alternative cryptocurrencies that offer greater anonymity, as well as services like mixers and tumblers that help obscure the source of funds by blending potentially identifiable cryptocurrency funds with large amounts of other funds, could boost the appeal of cryptocurrency for nefarious purposes,” SWIFT wrote, referring to privacy tokens like Monero or Zcash.
The report also noted that one layering technique employed by money launderers is to covert cryptocurrency into tangible assets. These could include high-end land and property assets such as tropical islands or luxury penthouses, gold bars, fine arts, jewelry and high-end watches.
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