Compliance professionals fear increasing money laundering of cryptocurrencies
A survey has revealed that 70% of compliance officers feel that crypto money laundering is becoming a major threat and they feel only partially equipped to deal with it.
First AML, the anti-money laundering start-up, conducted a survey of 250 UK business executives working in compliance. In the survey, 41% of companies claimed to have witnessed money laundering through cryptocurrencies.
Bion Behdin, Chief Revenue Officer at First AML, said:
The rise of cryptocurrency-related money laundering presents significant challenges for businesses attempting to combat financial crime. It is clear that current practices only partially address this threat and that keeping pace with new money laundering techniques is a significant challenge. Businesses must find effective ways to stay up-to-date with regulatory guidance, as well as continue to develop new processes to comply.
Is crypto really used for money laundering?
The public ledger characteristic of the blockchain makes it difficult for money launderers to hide the trail of the money. Due to growing social media awareness and the rise of on-chain scouts, the wallets of criminals are instantly in the public spotlight. Law enforcement agencies also track the activity of wallets.
Ultimately, law enforcement agencies have seized funds from money launderers because of blockchain technology’s transparency. Last year, authorities seized $25 million in Bitcoin from the Russian darknet marketplace Hydra, which was known to facilitate money laundering.
Last month, Europol seized nearly $50 million worth of Bitcoin from a money laundering racket.
Due to the large seizures by law enforcement agencies, the exit balances of the illegal addresses also decreased in 2022, according to a Chainalysis report. The screenshot below shows that the criminal wallet balance was down to $2.9 billion in 2022 from around $12 billion in 2021.
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