A new report by the Society for Worldwide Interbank Financial Telecommunication (SWIFT) says cryptocurrency is seldom used for money laundering activities compared to fiat or other traditional methods. Despite the loud narrative about how crypto assets are a preferred haven for illegally acquired funds, criminals prefer to launder proceeds through mules, front companies, or cash businesses as well as investing it into crime, according to the SWIFT report.
“Money laundering cases involving crypto remain relatively small.”
“Identified cases of money laundering through cryptocurrencies remain relatively small compared to the volumes of cash and fiat laundered through traditional methods,” SWIFT noted, in a report titled “Follow The Money” published last week. According to the UN’s Office on Drugs and Crime, around $800 billion to $2 trillion, which equals between 2% to 5% of global GDP, is laundered through cash channels each year. Criminals still prefer cash and fiat currencies over crypto for money laundering purposes.
The money laundering report, compiled in collaboration with financial research firm Bae Systems, reveals how criminals spin money through the financial system to obscure its fraudulent origins and ownership before reintroducing it back into the legitimate economy.
SWIFT mentions high-profile crypto scams.
The internet messaging firm SWIFT said that while cryptocurrency accounts for fewer cases, some are high-profile. A cyber-crime group allegedly converted funds stolen through ATM cashouts into crypto in one of the featured cases. Another case reported by SWIFT involved arrest and prosecution after authorities found 15,000 bitcoin, two sports cars, and jewelry worth $557,000 at the group leader’s house. However, the report’s authors observed that privacy-centric cryptocurrencies like Monero or Zcash could become attractive to criminals in the future.
The interbank messaging giant explained that cybercriminals might seek to use crypto to obfuscate and launder the funds stolen during a cyber-heist before making various purchases to integrate the money.