Money Laundering via Crypto: The Digital Dilemma

Money Laundering is a method by which illegal businesses hide their money from the authorities.

What is Money Laundering?

Money laundering is commonly used by those involved in fraud and other criminal activities to hide their money flows and sources of income. Money laundering systems have been used since the 1930s and originated as the practice of concealing alcohol sales during the Prohibition era in the United States. The main purpose of money laundering is to hide money from banks and authorities through the use of front companies, offshore banks and other fraudulent schemes. Money launderers often buy valuables such as art and luxury goods to avoid declaring their money.

Speaking of cryptocurrencies, many politicians around the world have begun to refer to cryptocurrencies as a form of money laundering.

Turkish President Recep Tayyip Erdogan banned the use of crypto-assets as a source of payment in 2021, citing criminality and fraud. Similar anti-cryptocurrency AML laws have appeared around the world in other countries, such as Northern Macedonia, Bolivia, and Algeria, as a result of increased efforts by governments to regulate and restrict cryptocurrencies.