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Methods for Laundering Coins (Tips for Money Laundering)

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According to a report from the Financial Crimes Enforcement Network (FinCEN), t

Methods for Laundering Coins (Tips for Money Laundering)

According to a report from the Financial Crimes Enforcement Network (FinCEN), the total amount of money laundering transactions in September and December 2018 was approximately $40 trillion. Among them, the cryptocurrency industry, especially Bitcoin transactions, received the most attention as they were considered “illegal activities”. The website also claimed that they would engage in money laundering to evade the anti-money laundering regulations in the United States. The “black market” usually refers to the process in which exchanges use digital assets to transfer funds, which is prevalent in many other regions worldwide. Therefore, people often take advantage of these anonymous features to easily profit from them.

Tips for Money Laundering

Editor’s note: This article is from HiveEcon, written by Yuan Shang and authorized to be reproduced by Odaily Star Daily.

The blockchain industry is currently experiencing a “feast” of money laundering and terrorist financing. According to statistics, over 50% of global cryptocurrency transactions are confirmed to be illicit activities, and the anti-money laundering actions taken by countries like the United States and Japan have made people increasingly interested in cryptocurrency assets. “We know that the cryptocurrency market is constantly growing, but due to inadequate regulation and the closure of some exchanges, these criminals have found it easy to engage in large-scale money laundering on this platform.” The head of the Financial Stability Board of the Bank for International Settlements stated, “This means that governments of various countries must take necessary measures to ensure the safety of funds and protect consumers from fraud and theft.” “Although many countries are currently cracking down on the cryptocurrency field, there are still many other issues that need to be addressed.” In addition, starting from October 1, 2019, the U.S. Securities and Exchange Commission (SEC) will issue emergency stop orders to all digital asset investors, enabling them to better understand their risk exposure and effectively prevent hacking attacks and other potential economic or technological threats. In mid-February of this year, The Wall Street Journal reported new developments in Bitcoin-related fraud cases. Some media analysis suggested that this event is related to the ICO bubble in 2017, and “similar incidents have occurred multiple times since the beginning of 2018”. Some even believe that this may be a scam; however, this pattern also has its limitations:

Firstly, there is a lack of appropriate legal frameworks specifically for the cryptocurrency field, such as The New York Times, to avoid illegal activities like ICO. Secondly, strict KYC/AML requirements are not enforced, especially electronic data reporting, which includes illegal actions such as providing false identity information, usernames, and identification documents. Thirdly, the use of third-party custodial services or institutions to store cryptocurrency assets is impossible. Fourthly, cryptocurrency exchanges and software operations without registration are also possible. Fifthly, transferring cryptocurrency tokens anonymously is a typical form of money laundering. How to prevent such new types of crimes? Cybercriminals often use various methods to launder money, fund corruption, or support the Silk Road dark web created by Ross Ulbricht and his accomplices. However, despite the fact that most money laundering processes rely on personal computer accounts, they are largely unstoppable. To counter these potential dangers, some professionals specializing in virtual currency businesses usually use multiple different tools to conceal their true origins and hide the value in their wallets, including cryptocurrency wallets, exchanges, wallet addresses, private keys, etc. One of the main methods used is monitoring customer accounts and wallet holders’ motivations and their ability to fully identify their identities.

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