News and Society

How Criminals Misuse Cryptocurrency For Money Laundering

The impact of cryptocurrency on the economy has been on a wider scale, ever since Bitcoin came into being and rose to global fame. With the popularity of Bitcoin, cryptocurrency became a topic of interest for both investors as a safe haven in times of inflation, as well as for criminals to practice money laundering. 

Now, it is indeed a bitter true fact that every technology comes with benefits as well as risks. Cryptocurrency is also not far from it. However, people have shown greater interest in exploring topics like Bitcoin opinion 2.0 and more other topics. 

Now when it comes to risks involved in this new digital monetary technology, then one of the major is price volatility. But my inclination is not specific on this factor but its misuse especially the one mentioned above. 

Yes, it is indeed a fact that cryptocurrency is the easiest tool for the criminal to practice unlawful activities like money laundering. However, you will be surprised to know that instead of cryptocurrency, criminals exploit more advantage of cash for such unlawful practices. 

Two years back, more than $800 million BTCs have been used illegally. Thanks to the digital ledger technology, a blockchain that stores the record of every Bitcoin transaction, the activities like money laundering can be managed.

But most businesses of all types are not sure about dealing with money laundering and other frauds on the latter decentralized digital ledger technology. It is all because they don’t have much idea about how to execute the Id verification techniques like KYC. 

Or maybe they think it is not their job to curb such activities. In short, they pass on this responsibility to law bodies. But little do they realize that such a callous approach can land them into a big problem.

Money Laundering Must Be Taken Seriously

Hence, such things must be taken on a serious note, rather than finding another solution or passing on to law-making bodies. Money laundering can be intercepted up to an extent if proper steps are taken to secure the information of customers. They must develop mechanisms that would trace any risk. Besides this, they should stick to AML procedures. In this way, they can drop the taint of such criminal activity on cryptocurrency. 

How Criminals Practice Money Laundering

Now, you need to know about how these criminals practice the art of money laundering. For that, they hatch out a plan to conceal the illegal funding through several means. The simplest way to forge crypto money states about the transactions done in crypto secretly. But besides this, there are other illegal means to carry out the practice of money laundering. 

Lack Of AML Procedures

Lack of AML procedures like KYC is the main vulnerability that is exposed raises the chances of money laundering practices by criminals. The regulated exchanges are supposed to follow the Know Your Customer policies for customer safety. This enables linking of data of transactions with the customer by fragmenting the concealment of every transaction. 


Criminals often play a clever tactic to hide the source of funding through an anonymous service and get away with cracking the transaction linkage of Bitcoin. A usual excuse for such unlawful anonymous activity comes with an argument indicating the use of concealed service providers is for the protection of privacy. It is applied both on an exchange as well as via ICO, where a particular crypto coin is being used for the payment for the different crypto coin, thus shading the origin of the digital currency. 

Ungoverned Crypto Exchanges

Besides the above-mentioned factors, criminals also get away with money laundering via cryptocurrency exchanges that are not regulated. These are those crypto trading platforms that don’t follow AML techniques and are unable to execute a tougher and in-depth checking for identification. They allow the trading of cryptocurrencies multiple times across several markets.

Bitcoin ATMs

Another big advantage of money laundering practiced by notorious minds is Bitcoin ATMs. Since cash deposits are acceptable in these automated monetary machines with the provision of QR code. Criminals can fetch out the opportunity to scan it at a regular exchange and can withdraw any digital currencies or even Bitcoin. 

Plastic Card Money And Crypto Sites

Listing other two factors of money laundering is plastic card money as well crypto sites of gaming and gambling. Talking about the former, debit cards can also be misused for illegal financing meant for other currencies trading. Another to include is the crypto sites where gambling and gaming where major cryptocurrencies like Bitcoin are accepted as a payment mode, and of course for scheming money laundering tricks.  


So these are some of the main methods of practicing money laundering by the notorious minds. In one of these factors, there is one major point that I mentioned is MSBs or unregulated cryptocurrency exchanges are to be blamed for allowing such illegal financing activities under their nose. 

And it is all because they are not compliant with AML practices like KYC. They need not pass on this to only law-making bodies but have to develop some measures including advanced blockchain technology and a reliable verification technique. Upgrade your crypto knowledge with topics like the list of stable cryptocurrencies and more on the Cryptoknowmics.


Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button