According to the European Union Agency for Law Enforcement Cooperation (Europol), 3 to 4 billion pounds of black money is being laundered by criminals using cryptocurrencies. “It’s growing quite quickly and we’re quite concerned. They’re not banks and governed by a central authority so the police cannot monitor those transactions. And if they do identify them as criminal they have no way to freeze the assets unlike in the regular banking system.” Europol’s director, Rob Wainwright, told BBC’s Panorama.
In theory, laundering money via bitcoin would involve buying cryptocurrency and breaking it into its smallest values and distributing it to various addresses. This should eradicate any trail left behind by the criminal money. But, some experts claim that there is more to it than just that.
Bitcoin is not completely anonymous as most people believe and can be traced by investigators through public records. Other cryptocurrencies, however, may be more difficult to track. We have seen many European governments asking for a crackdown on cryptocurrencies.
France’s Finance Minister, Bruno Le Maire and interim German Finance Minister, Peter Altmaier have even called for a global regulation. They have talked about the harmful results that might occur for misinformed investors who do not fully realize the risks they are being exposed to.
Le Maire and Altmaier have signed a letter to fellow G20 finance ministers, in which they say cryptocurrencies threaten long-term global financial stability as well as being risky for investors. “Given the fast increase in the capitalization of tokens and the emergence of new financial instruments … these developments should be closely monitored,” they said.
Theresa May, the British Prime Minister also recorded her concern regarding the cryptocurrencies and how they were facilitating the criminals in laundering money. Christine Lagarde, International Monetary Fund (IMF) chief, also recently told the World Government Summit in Dubai that “there is probably quite a bit of dark activity in cryptocurrencies,” and she claimed that regulation is an inevitability.”
The claim about laundering money using the cryptocurrencies came after the arrest of a high-profile cybercriminal Sergey Medvedev’s arrest in Thailand. Medvedev, who was the Russian co-founder of criminal marketplace Infraud, reportedly had 100,000 Bitcoins in his apartment when it was raided.
The Vice President of San Francisco-based cybersecurity company RiskIQ, Fabian Libeau, was also quite outspoken when talking about cryptocurrencies criminal potential. “We are seeing threat actors around the world exploiting what is already a hostile currency in a lawless digital world. Threat actors hack vulnerable sites or spin up fake, illegitimate websites to siphon money off of major brands, often with typosquatting domains and fraudulent branding,” he said.
If the cryptocurrencies are not regulated, reports similar to this one will keep coming to light.