Crypto money laundering has evolved into a sophisticated process used by criminals to obscure the origins of illicit funds.
Stages of Crypto Money Laundering
The process involves several stages. First, criminals gather illegally obtained funds. Next, they purchase cryptocurrencies through multiple transactions across exchanges. Then, they move assets across platforms to obscure ownership, finally reinvesting the cleaned money into the economy.
Methods Used by Criminals to Launder Cryptocurrencies
Criminals exploit non-compliant centralized exchanges, decentralized exchanges, mixers, and bridge protocols to hide the origins of their funds. These methods permit anonymous transactions and cross-chain conversions.
National and International Frameworks for Crypto AML
Several countries have introduced laws and guidelines to thwart crypto money laundering. For instance, in the U.S., the Financial Crimes Enforcement Network (FinCEN) imposes regulations on crypto service providers. Canada and EU nations have implemented their own control measures.
Crypto money laundering poses a significant threat, prompting law enforcement to enhance tracking and preventive measures.
