SWIFT Says Criminals Prefer Cash for Money Laundering, Not Cryptocurrency

A brand new report by the Society for Worldwide Interbank Financial Telecommunication (SWIFT) says cryptocurrency is seldom used for cash laundering actions in comparison with fiat or different conventional strategies.

Despite the notion that crypto belongings are a most well-liked haven for illegally acquired funds, criminals favor to launder proceeds by mules, entrance corporations, or money companies in addition to investing it into crime, it mentioned.

“Identified cases of laundering through cryptocurrencies remain relatively small compared to the volumes of cash laundered through traditional methods,” SWIFT famous, in a report titled “Follow The Money”, revealed final week.

Money laundering stays a big drawback for economies all through the world. According to the UN’s Office on Drugs and Crime, round $800 billion to $2 trillion, or the equal of between 2% to five% of world GDP, is laundered by money channels annually. But crypto doesn’t function prominently.

The cash laundering report, compiled in collaboration with monetary analysis agency Bae Systems, appears at how criminals spin cash by the monetary system to obscure its fraudulent origins and possession earlier than reintroducing it again into the official economic system.

SWIFT, an interbank messaging agency, mentioned whereas digital forex accounts for fewer circumstances, a few of these are high-profile. In one of many featured circumstances, a cyber-crime group allegedly transformed funds stolen by ATM cashouts into crypto.

Another case concerned arrest and prosecution after authorities discovered 15,000 bitcoin (BTC), two sports activities vehicles, and jewellery price $557,000 on the group chief’s home. The authors noticed that privacy-centered digital belongings like Monero or Zcash might sooner or later turn out to be enticing to criminals, saying:

The raft of different cryptocurrencies that supply better anonymity, in addition to companies like mixers and tumblers that assist obscure the supply of funds by mixing probably identifiable cryptocurrency funds with giant quantities of different funds, might increase the enchantment of cryptocurrency for nefarious functions.

SWIFT defined that online-thieves may search to make use of crypto as a method for obfuscating and laundering the funds stolen throughout a cyber-heist, earlier than making numerous purchases as a way to combine the cash

“In this instance, cyber-criminals might launder the stolen funds at a bitcoin farm, before using financial platforms to load prepaid cards with bitcoin,” mentioned the report.

The alleged North Korea-linked Lazarus Group heist, involving the switch of stolen funds throughout the crypto ecosystem, in addition to the usage of Chinese facilitators to money stolen crypto belongings supplies perception into one of many strategies used. Prepaid playing cards linked to crypto wallets can even facilitate the reversion of stolen crypto again to fiat in small quantities.

Another layering method includes changing cryptocurrency into tangible belongings. Per the report, “there are dedicated sites that facilitate the purchase of high-end land and property assets across the world, including luxury penthouses and tropical islands, as well as watches, jewelry, gold bars, and fine arts.”

SWIFT notes concern inside the monetary system, that peer-to-peer purchases on on-line markets for luxurious belongings assist to maintain ill-gotten wealth hid.

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