Crypto money-laundering

AS LONG as dirty money has been around, so has money-laundering. Between $800bn and $2trn, or 2-5% of global GDP, is washed annually, estimates the United Nations Office on Drugs and Crime. Criminals have swapped money for precious metals, mis-stated invoices, rinsed cash through casinos or simply strapped it to their bodies and flown to places where banks don’t ask questions. Now they have a new detergent: crypto-currencies.Such data as there are suggest that crypto-laundering is still a small share of the whole. But crypto-currencies’ attractions—global availability, the speed and irreversibility of transactions and the ability to hide identities—are plain. Rob Wainwright, head of Europol, Europe’s police agency, has estimated that 3-4% of the continent’s annual criminal takings, or £3bn-4bn ($4.2bn-5.6bn), are crypto-laundered. He thinks the problem will get worse. America’s Drug Enforcement Administration believes international gangs are using crypto-currencies...Continue reading Digital detergentCrypto money-laundering Will crypto help the money-launderers of the future? print-edition icon Print edition | Finance and economics Apr 26th 2018 twitter icon facebook icon linkedin icon mail icon print icon AS LONG as dirty money has been around, so has money-laundering. Between $800bn and $2trn, or 2-5% of global GDP, is washed annually, estimates the United Nations Office on Drugs and Crime. Criminals have swapped money for precious metals, mis-stated invoices, rinsed cash through casinos or simply strapped it to their bodies and flown to places where banks don’t ask questions. Now they have a new detergent: crypto-currencies. Such data as there are suggest that crypto-laundering is still a small share of the whole. But crypto-currencies’ attractions—global availability, the speed and irreversibility of transactions and the ability to hide identities—are plain. Rob Wainwright, head of Europol, Europe’s police agency, has estimated that 3-4% of the continent’s annual criminal takings, or £3bn-4bn ($4.2bn-5.6bn), are crypto-laundered. He thinks the problem will get worse. America’s Drug Enforcement Administration believes international gangs are using crypto-currencies more. Get our daily newsletterUpgrade your inbox and get our Daily Dispatch and Editor's Picks. Latest stories When Tuareg music and rock’n’roll collide Prospero6 hours ago The Ronny Jackson car crash Democracy in America7 hours ago For farmers in the developing world, geography is not destiny Graphic detail7 hours ago Mario Vargas Llosa on freedom, liberalism, dictatorship and ideas Open Future9 hours ago Mario Vargas Llosa: in Spanish Open Future9 hours ago A court ruling makes it harder for faith-based employers to discriminate Erasmus10 hours ago See more Dirty cash—from drug-dealing, say—can be washed by converting it into crypto, splitting it into smaller amounts and moving it through the crypto-sphere, perhaps via several virtual currencies. Dirty crypto, for example from a ransomware attack, can be similarly swapped around—often at high speed (“atomic swaps”) and in little chunks (“micro-laundering”)—until it is clean enough to be switched into ordinary money. Authorities are slowly catching up. Last month a Briton was jailed in the Netherlands for taking €11m ($13.2m) in dirty bitcoin from criminals, converting these into ordinary money through his bank account, withdrawing the cash and returning it to the crooks, minus a cut. But professional launderers are using more sophisticated methods, often mixing old and new ways to evade detection, says Michael McGuire of Sussex University. Europol recently uncovered how European crime bosses used crypto to pay a Colombian drug cartel for cocaine. European henchmen visited crypto-exchanges to convert euros into anonymous virtual currencies. These were sent to a digital wallet registered in Colombia and swapped into pesos on an online exchange. The pesos were withdrawn in cash, which local “money mules” spread over dozens of bank accounts, in sums small enough to avoid suspicion. The cartel bosses got the money by withdrawing the cash or by e-transfer. “Sticking £10,000 down your underpants and flying to Zurich is still quite a common and easy way to launder money,” says Mr McGuire. But he warns that as governments work to get cash off the street and crack down on other ways of washing money, cyber-laundering may well be the future. This article appeared in the Finance and economics section of the print edition under the headline "Digital detergent" print-edition icon Print edition | Finance and economics Apr 26th 2018 twitter icon facebook icon linkedin icon mail icon print icon Reuse this contentAbout The Economist

 

Bojíte se nám napsat ze svého e-mailového účtu? Založte si ihned nový zabezpečený e-mail.

ZALOŽIT NOVÝ E-MAIL PŘIHLÁSIT SE K E-MAILU