Crypto Fueling Rise in Complex Money Laundering Schemes in 2024, Eurasian Group Warns
The use of cryptocurrency is driving a surge in sophisticated money laundering tactics in 2024, according to a recent report from the Eurasian Group on Combating Money Laundering.
Increasing Complexity of Money Laundering
The report highlights the growing reliance on cryptocurrency and multi-layered methods in money laundering schemes, signaling a concerning trend in illicit financial activities. Professional money launderers are employing a combination of cryptocurrencies, fake identities known as “droppers,” and cash to facilitate their operations.
Use of Cryptocurrencies in Money Lauundering
The report specifically mentions the use of crypto exchanges, both domestic and foreign, and crypto wallets that are often opened under false identities. These tactics have been identified in cases of terrorism financing, underscoring the challenges faced by authorities in combating financial crimes.
Global Concerns Over Crypto Risks
Financial regulators worldwide are increasingly worried about the role of cryptocurrency in illicit financing. Switzerland’s Financial Market Supervisory Authority recently issued a warning about the risks associated with money laundering through cryptocurrencies, particularly highlighting the use of stablecoins in cyberattacks, illegal transactions on the dark web, and sanctions evasion.
Challenges with Stablecoins
Stablecoins, which are pegged to a stable asset like the US dollar, have witnessed a significant increase in illicit transactions, complicating efforts to prevent money laundering. In response, FINMA has outlined a series of initiatives to address these risks, including onsite reviews, updates to audit programs, and a focus on risk management for entities with politically exposed clients or connections to high-risk regions.
Conclusion
The proliferation of cryptocurrency has brought about new challenges for combating money laundering and terrorism financing. As regulators and law enforcement agencies grapple with increasingly complex schemes, it is crucial for global cooperation and enhanced regulatory measures to stay ahead of financial criminals.