By Hassan Mehmood (Saudi Arabia)
Fiat currency is more used as a means for money laundering as compared to cryptocurrency, the SWIFT’s report says. The popular narrative, which claims that most of the illegal activities are done through cryptocurrency, is wrong.
SWIFT’s Report
The report published by the Society for Worldwide Interbank Financial Telecommunication (SWIFT) says that fiat money is still the major channel to launder money. According to the research conducted by the United Nations, almost $800 billion to $2 trillion is laundered via fiat money each year. The Worldwide Interbank Financial Telecommunication (SWIFT) said:
“Identified cases of laundering through cryptocurrencies remain relatively small compared to the volumes of cash laundered through traditional methods.”
SWIFT further claims that conventional methods including front companies, mules, cash businesses, hawala, illicit activities, and the drug trade are at the forefront of money laundering. Cryptocurrency, in comparison, has a little share in money laundering.
There are some cases in which hackers use stolen funds to buy cryptocurrency debit cards that convert crypto into fiat at the time of transaction. “Prepaid cryptocurrency cards can facilitate the reversion of cryptocurrency back into fiat currency in small amounts. This technique is enabled by a loophole so when the original financial institution issues the card, it does so in conjunction with the card issuer’s partner – this partner company receive and convert the funds from cryptocurrency into fiat currency,” the report reads.
SWIFT also said that cryptocurrency’s use in the laundering of stolen funds will rise in the future. “Favorable factors include the growing number of altcoins (alternative cryptocurrencies) that have recently launched and which focus on providing full transaction anonymity”, SWIFT added.
SWIFT’s report stated that the awareness of new money laundering techniques is needed. “Awareness of new money laundering techniques, such as those involving cryptocurrency, will be key to staying ahead of the challenge of reducing the opportunities for threat groups to benefit from committing high-value cyber heists, SWIFT concluded.
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