In recent years, there has been a constant increase in cryptocurrency usage. Many companies and individuals are trading with Bitcoins, which is an indication that more people are trusting the currency. As the usage of crypto increases, cybercriminals are using it to perform illegal activities such as money laundering and terror financing.
Some terrorist organizations use cryptocurrency to sell weapons on the black market by transferring bitcoins to sellers and buyers. They also transfer the bitcoins to pay for terror activities and bombings without leaving a trace.
How Cryptocurrency is Used for Money Laundering
On 22nd April 2022, Indian Finance Minister Nirmala Sitharaman said, “There is a severe need for regulation in the crypto market. It will help reduce the money laundering and terror financing risks. If all the countries came together, it would be effortless to regulate crypto usage in all illegal activities, making it a safe technology to use globally.”
Reports from Chainalysis 2022 indicate that money laundering happened in 2021 at over $8.6 billion. There is an emergence of many cybercriminals using crypto for money laundering purposes. They use the dark exchange to clean the coins and transfer them to another cryptocurrency wallet, which can later be sent to a different account in dollars.
Money laundering happens using bitcoin and other altcoins, which cannot be easily suspected, and that is how the cybercriminals are taking advantage of the crypto. This has created a negative image of the usage of the currency, that some countries have banned its use.
How to Stop Cryptocurrency Money Laundering?
In countries where there is a high use of crypto, the government should introduce taxing on the cryptocurrency, which will help identify the individuals who use crypto for payments. This is one of the best ways to curb illegal activities done with crypto, as the government can trace them to the individual wallet used to transact in in case of money laundering and terrorism funding.
