Is Crypto Emerging as Modern Money Launderers' Choice?

2 mins

Cryptocurrencies have emerged as an attractive choice for modern money launderers due to their decentralized nature, anonymity, and speed of transactions. Criminals may move illicit funds through hundreds of wallets before cashing out at a crypto exchange. In 2021, $8.6 billion was laundered through cryptocurrencies, representing a 30% increase from the previous year.

Between 2011 and 2019, major exchanges helped cash out 60% to 80% of Bitcoin transactions from known bad actors. However, this percentage has reduced as exchanges began implementing stricter anti-money laundering (AML) measures. In 2019, $2.8 billion was laundered through cryptocurrency exchanges, up from $1 billion in 2018. A small number of exchanges enable the money-laundering trade of cryptocurrency for fiat currencies, with just five cryptocurrency exchanges being responsible for a significant portion of the illicit funds.

Many countries have implemented regulations to tackle money laundering via cryptocurrencies. However, some argue that modern know-your-customer (KYC) and AML regulations are ineffective and that cryptocurrencies could provide a better solution to address this problem. Despite the increasing use of cryptocurrencies for money laundering, cash remains the most common medium of exchange for this illicit activity. The United Nations estimates that $800 billion to $2 trillion of fiat is used for money laundering yearly.

In conclusion, cryptocurrencies have become an attractive choice for money launderers due to their anonymity, decentralized nature, and transaction speed. While the volume of illicit crypto transactions has increased, cash remains the most common medium for money laundering. Governments and regulatory bodies worldwide are working to implement stricter AML measures to curb money laundering using cryptocurrencies.

Here, we are looking at some noteworthy money laundering schemes involving traditional financial institutions and cryptocurrencies over the past decade. Are cryptocurrencies emerging as a safer choice for money launderers? Let's explore the below infographic for an answer. 


money laundering scams