Money Laundering and Cryptocurrency by Chainalysis

Money Laundering and Cryptocurrency While public blockchains are inherently transparent and traceable, illicit actors turn to cryptocurrencies to launder ill-gotten gains for the same reasons people use them for legitimate purposes: they are cross-border, virtually instant, and generally inexpensive to transact.

Money laundering in the crypto context is typically associated with cybercriminals attempting to conceal the flow of funds related to on-chain crimes, such as darknet market and ransomware operations. However, cryptocurrency is increasingly being used to launder funds from a broader range of illicit activities beyond the conventional understanding of crypto crime.

The growing ubiquity of crypto has made it a tool for laundering proceeds from various off-chain crimes, such as narcotics trafficking and fraud. In 2024, money laundering in crypto encompasses all crime — not just that which is inherently tied to the crypto ecosystem. This shift carries significant implications for investigators.

First, expertise in cryptocurrency must extend beyond specialized cybercrime units to include law enforcement agencies of all kinds. Cryptocurrency is now one of the payment methods used by illicit actors worldwide, and therefore this expertise must encompass both blockchain transaction tracing and a comprehensive understanding of traditional money laundering tactics.

Second, there is a silver lining: with the right data and tools, investigators in the public and private sectors can leverage the transparency of blockchain to uncover illicit activity that may otherwise go undetected. Blockchain analysis can generate both intelligence signals for proactive lead generation and more concrete evidence of illicit flows in existing investigations, helping a broad range of analysts and investigators unravel increasingly sophisticated money laundering networks.

Author

AiUTOMATING PEOPLE, ABN ASIA was founded by people with deep roots in academia, with work experience in the US, Holland, Hungary, Japan, South Korea, Singapore, and Vietnam. ABN Asia is where academia and technology meet opportunity. With our cutting-edge solutions and competent software development services, we're helping businesses level up and take on the global scene. Our commitment: Faster. Better. More reliable. In most cases: Cheaper as well.

Feel free to reach out to us whenever you require IT services, digital consulting, off-the-shelf software solutions, or if you'd like to send us requests for proposals (RFPs). You can contact us at [email protected]. We're ready to assist you with all your technology needs.

© ABN ASIA