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Usual Practices Of Money Laundering In Cryptocurrency

To bring down the cases of money laundering, it is very necessary for MSBs to be compliant with Anti Money Laundering and remove the taint from cryptocurrency.

Cryptocurrency might have been successful in getting applauded by many people around the world. This digital financial concept has always spawned interest to know about the crypto coin market and various other aspects. Even though there have been doubts about this digital technology of being a soft platform to carry out illegal trading, still, it has been noticed that the activity of money laundering is less scattered in comparison to transactions done through cash. In the previous year (2019) the spending of Bitcoin on the dark web was mere $829 million. As you must be knowing a public record of each transaction is executed by blockchain technology, there is a prevailing financial threat existing in cryptocurrency, one such is money laundering. However, it can be managed somehow.

Many money service businesses have no clarity about their objective to intercept money laundering and other related illegal activities on the blockchain. Now there can be two versions of this approach. Firstly, they might not be aware of executing basic processes of AML, like KYC (Know Your Customer) a mechanism to verify identities. And the other reason that explains is they are least bothered to involve themselves in facing challenges of exposing criminals. If these two approaches are true, then we can assume that they must be giving a blind eye to solve the problem and look for other ways. Now, this is how they commit a big blunder.


There will be continuous attempts made by criminals to misuse Bitcoin’s blockchain, but much emphasis should be focused on preventing money laundering with some useful mechanisms that help match data of the customer with a history of Bitcoin transactions. This will enable MSBs to track down high-risk customers, to be cooperative with AML. If it is followed, then the scar of money laundering practice planted on cryptocurrency will be avoided. 


Different Methods Of Money Laundering Practiced By Criminals


The main motive behind practising crypto money laundering by criminals is to conceal the illegal funds. These are done with the help of several methods. Money laundering in cryptocurrency is done in three stages that are:


Crypto ATMs

There are many Bitcoin ATMs that you will find worldwide. Being internet connected, these ATMs allow buying of bitcoins through credit or debit cards by the users. But besides accepting card payments, Bitcoin ATMs also allow cash deposits, by giving a QR code for scanning at the regular exchange, to withdraw digital currencies including Bitcoin. Unfortunately, criminals can find ways to track down the loopholes in the management of crypto ATMs. Because of it, they are prepared to take the risk of money laundering. 


Unchecked Crypto Exchanges

Another easiest way through which criminals practice money laundering is unregulated crypto exchanges. These unchecked exchanges are not supportive of AML practices, which becomes a reason for failing in conducting stricter and detailed verifications for cryptocurrency trading across several markets. 



Being a crypto enthusiast, this must be known by you that the cryptocurrency transactions are generally followed through blockchain ledger technology. But once the tainted digital currency is on the way, it comes under prying eyes of criminals in applying anonymous service to conceal the source of funds by hampering the Bitcoin transaction connectivity. 


Gambling And Gaming

Other important methods which criminals conduct for money laundering scheme are gambling online and gaming sites where Bitcoin or any other digital currency is accepted. To buy virtual chips and credit, users prefer cryptocurrency. They do this for cashing out again after low transactions.


P2P Networks

Criminals are very smart enough in turning up their visionary compass to P2P (Peer to Peer) networks that are constantly international. They do this to minimize the risk of money laundering. And then these crooked minds make the best use of third parties by sending funds on their way to a new place.


Pre-Paid cards

Debit cards that are pre-paid and are loaded with cryptocurrency give another best opportunity for the criminals to execute money laundering. These prepaid cards are utilized for funding purposes regarding unlawful activities. 



The more interest people take in knowing about the cryptocurrency market ranking chart, the more they need to be aware of money laundering practised by criminal minds in different methods. These include games and gambling, prepaid cards, crypto ATMs, crypto exchanges that are unregulated and hiding. These are the main extracts that are referred by criminals to take the risk unlawful activity like money laundering very confidently. But there can be other methods too which allow them to practice this illegal monetary method. Such unlawful activities can only be intercepted with the joint contribution of MSBs and Anti Money Laundering. This will bring down money laundering cases to an extent.

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