Is Crypto Laundering Possible?
💰Cryptocurrency has the potential to be used for money laundering, though the extent of it is unknown. Many people are concerned that because of the decentralized, anonymous nature of cryptocurrencies, they can be used to facilitate illegal activities, including money laundering. Sending digital assets using blockchains is a significant way for criminals in the crypto market to launder money since it will bypass a centralized service that can trace and freeze transactions.
👨💼We all now know that cryptocurrencies are an attractive option to money launderers because of their anonymity and the speed with which they can be transferred between users via exchanges.
📊The difference between money laundering and crypto laundering is cryptocurrency exchange users do not have to identify themselves to the same extent or use regulated banking infrastructure to move their funds. Cryptocurrency transactions require only the unique addresses of users’ crypto wallets and take place directly between senders and recipients anywhere in the world with no need for scrutiny by a centralized authority or intermediary administration. On the other hand, money laundering with fiat currencies requires customers to submit personal identifying information to create accounts with banks and other financial service providers, then use the banks’ infrastructure to perform transactions, transferring illegal funds into and out of the financial system to conceal their origin.
🔗There is no codified paper trail of cryptocurrency transactions other than a cryptographically secured record on the blockchain. While cryptocurrency exchange platforms involve a certain level of customer identification and record-keeping, criminals still profit from the anonymity and speed associated with the online transfer of funds.
⚠While it is impossible to eradicate crypto laundering, some steps can be taken to mitigate its effects, such as increased monitoring and enforcement of anti-money laundering laws.
📰Read more about “Is Crypto Laundering Possible?” in our blog article here: https://bit.ly/3u8e8vD
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