Fiat is Far More Common Than Bitcoin for Money Laundering, Confirms US Treasury Department

The US Treasury Department published three-yearly reports earlier this month on money laundering, terrorist financing and proliferation financing. All of these reports extensively covered virtual assets.

Although they acknowledge many of the risks involved in these areas, they also note that traditional networks and fiat currency are still more widely used than crypto for illicit finance.

Crypto for Money Laundering

The National Money Laundering Risk Assessment identified “virtual assets”, as a constantly-evolving tool in money launderers growing arsenal for hiding their funds. DeFi and anonymity-enhancing technologies were specifically identified as possible culprits.

According to reports, virtual assets also played a major role in ransomware and phishing scams during the pandemic. To lure victims into divulging their personal information and to install malware on their computers, nefarious actors might use the volatile crypto market to make them promise financial gains. After an attack, attackers might demand payment in crypto, which is both irreversible and pseudonymous.

The report states that crypto is being used to launder money, including drug money. This is consistent with a Chainalysis crime report that found more money was sent via criminal blockchain addresses in 2021.

The Treasury Department however admits that criminal money is still the king. They state that “the use of virtual assets to launder money remains far lower than the use of fiat currency or other traditional methods.”

Chainalysis found that although criminals are increasing in crypto, the percentage of illicit funds in the space is still at an all time low. It only accounts for 0.15% in all transactions. This is down from 0.62% for 2020 and 3.37% for 2019.

Crypto is Effective in Crime Prevention

This report clarifies that cryptocurrency is not a good option for criminals. Peer-to-peer transactions, self-custodial and self-custodial crypto wallets can be used to help users evade financial controls. These controls can often only be targeted at centralized intermediaries. The other side is that most blockchains, including Bitcoin, use transparent public ledgers which can make it easier for criminals to be tracked down.

As officials struggle to counter the threat of Russian crypto-use for sanctions evasion, illegal trade in crypto has become a hot topic. Tom Robinson, CEO of Elliptic blockchain analytics firm, stated that crypto can and will be used to evade sanctions. However, it is not a magic bullet.

Read More

2021's Most Anticipated Growth & Wealth-Building Opportunity

Join Thousands of Early Adopters Just Like You Who Want to Grow Capital and Truly Understand Cryptocurrency Together

Marla Brooks

Marla Brooks – Financial Analysis My name is Marla Brooks, and I am the mainstream behind the”observednews.com”  for the powerful and most delicate insights into the latest activities in the financial analysis category. I started my journey as an independent financial consultant. I had approximately nine years of experience in this field. I am free soul so; my passion for exploring the world has taken me to the nations across the globe and given me the chance to report for a portion of the best news associations. Currently, I am a full-time editor as experienced in finance and started to use my abilities.

2021's Most Anticipated Growth & Wealth-Building Opportunity

Join Thousands of Early Adopters Just Like You Who Want to Grow Capital and Truly Understand Cryptocurrency Together

Close Bitnami banner
Bitnami