Cryptocurrency can be used to disguise and move illicit funds quickly and anonymously around the world. It is especially attractive to criminals because there are few rules, regulations, or enforcement in the crypto space.
According to BanklessTimes.com, the amount of cryptocurrency laundered in 2022 surged by 67.6%.
Jonathan Merry, the CEO of BanklessTimes, spoke on the data, “Crypto space is growing rapidly, and criminals are taking advantage of it. We must take steps to ensure that this type of illegal activity does not become commonplace.
“Money launderers are sophisticated and take advantage of the anonymity and lack of regulation in the crypto space. Often, they use a mix of traditional methods, such as shell companies and offshore accounts and crypto transactions to move large sums of money undetected.”
Crypto Laundering Is Bad for the Crypto Image
The alarming increase in crypto laundering is not only a problem for the industry. It is a big challenge to governments and law enforcement agencies as well. The rise in dark crypto money undermines the efforts to combat financial crimes. Moreover, it hampers the ability of governments to track the flow of illegal funds.
This is a serious problem that needs a solution. Cryptocurrencies are still in their infancy and need to grow. If they are used for criminal activity, it could damage their reputation and hinder their development.
The increase in cryptocurrency laundering is a cause for concern. It is essential to take steps to prevent it from happening. Otherwise, it could damage the reputation of cryptocurrencies and hinder their development.
Criminals Have Devised Laundering Mechanisms
Cryptocurrency launderers use a variety of methods to clean their coins. The most common is to mix them with other coins to make them harder to trace. In this case, criminals send the coins through different addresses before they are finally deposited into a wallet.
Also, they use a service that converts coins into another currency. They rely on services like ShapeShift or Changelly to achieve this. These services make converting crypto into fiat currency or another cryptocurrency easy.
Some criminals obfuscate to make their coins harder to trace. Obfuscation involves sending the coins through a series of mixers and tumblers. Therefore, it becomes difficult to identify the source.
Authorities should establish regulations to weed out criminals in the crypto sector.