There is no doubt that digital currencies benefit individuals, companies and institutions by making it easier to access financial products and services.
According to a UN report, laundering the world economy costs between 800 and 2 trillion dollars a year. This amounts to 2% -5% of world GDP. Today, more than 90% of money laundering has not yet been detected. However, advances in technology have led to the emergence of newer and faster tools. Criminals use this development to continue money laundering. Meanwhile, government agencies and financial technology companies use technology to characterize transactions and detect fraud.
Money laundering using Bitcoin
Is Bitcoin (BTC) really the preferred way for criminals to launder money?
Crypto assets are a numerical representation of value that can be traded or transferred digitally and used as a payment method. Bitcoin is the most popular digital asset today. In the media, Bitcoin is often associated with the infamous Silk Road – the first modern online Darknet marketplace – where online users can anonymously buy goods such as illegal weapons and drugs. In 2013, the US FBI stopped its first comeback to the market.
Regular media content about bitcoin and digital assets focuses on criminal activity instead of technology and innovation. A typical email looks like this: Bitcoin can help criminals because of anonymity. If we go deeper into this statement, is Bitcoin the preferred way for criminals to launder money?
What about banks?
Another tender for payment is cash. Banks still need traditional identification systems that use the least volatility of user information to transfer and transfer money. National borders severely limit processing times and actual currency conversions. Less obvious to the typical consumer is that money can be sent from laptops and computers with a single click, while conversions can be converted or hidden in a matryoshka-like system of fake companies in strategic jurisdictions.
Taking care of our financial system is also linked to money laundering.
Globalization means new opportunities to develop suspicious ways of transferring money that benefit from economic inequality between countries. “It is bad to mention money laundering. Instead, it is about asset management structures and lucrative tax schemes, says the British investigative journalist John Sweeney. Banks, managers of our financial system, are linked to money laundering.
Financial institutions have been repeatedly fined for failing to comply with strict money laundering laws. HSBC's $ 881 million money laundering scandal is just a story that hit the media and became the original Netflix documentary. Digital currency technology and innovation are more efficient, reliable and scalable ways to transfer and transfer assets in our global economy, but what development is still needed?
2019 was a record year for the number of fines imposed, with authorities imposing 58 fines to combat money laundering, totaling $ 8.14 billion, double the amount imposed in 2018, with 29 fines totaling $ 4.27 billion dollars. The US organizers were the most aggressive and imposed 25 fines totaling $ 2.29 billion, while the United Kingdom came in second with 12 fines totaling $ 388.4 million, according to a recent report.
Two thirds of the sanctions against money laundering were imposed on banks, while around 17% were given to organizations in the gambling, gambling and cryptocurrency sectors. These industries are subject to closer control by regulators, as they are common channels for money laundering.
Sanctions against money laundering in 2019
Sanctions against money laundering have increased since 2015. The average fine was $ 145.33 million in 2019. By 2020, we have already seen more than $ 1 billion in sanctions, the largest of which is a $ 5.1 billion sanction issued by French government.
AML processing and cryptocurrency regulation
The emergence of new instruments for the treatment of AML is usually assessed by regulatory authorities before approval is obtained. In 2019, stricter regulations were introduced against money laundering for money and digital assets such as cryptocurrency. But the cipher domain will continue to grow.