Surge in cryptocurrencies driving new hitech virtual money laundering

By
Maxwell Awumah, GNA

Hohoe, July 16, GNA – The Rising spate in the
theft of cryptocurrencies is driving the surge of a new, high-tech era of
virtual money laundering, a headache to governments globally, according to a
report.

In the first half of 2018, more than US$760
million in cryptocurrency was stolen from exchanges – a threefold increase from
all of 2017, according to a report from CipherTrace, a California-based
blockchain security firm, copied to the Ghana News Agency.

It said in the past two years alone, criminals
have made off with some $1.21 billion in virtual cash, the firm’s quarterly
report on the subject said.

There are currently close to 2,000 different
crypto coins, all of which provide a desirable amount of anonymity for
criminals wishing to hide their true identities, such as terrorists,
extortionists, identity thieves, drug and weapons dealers, and human
traffickers.

It observed that crypto transactions do not
require people to use their real names and do not move through financial
intermediaries like banks or PayPal. Instead, users buying and selling coins
are typically represented by unidentifiable addresses.

Services that wash illicitly acquired crypto
coins are widely available, the CipherTrace report said. Some are even
advertised through Google AdWords.

It noted money laundering in the era of
cryptocurrency is more convenient, albeit more complicated, than traditional
laundering schemes.

Rather than purchasing expensive items or
establishing a sham business, the first step of the virtual cleansing process
is called “layering,” according to CipherTrace.

This involves moving money around the
cryptocurrency system until the web of transactions is sufficiently difficult
for investigators to trace.

It said once the money’s history is
appropriately murky, the funds can be integrated into the mainstream financial
system with little risk.

Cryptocurrency gambling sites, of which there
are some 200 available, are also frequently used as money laundering tools, the
report said.

These sites have little to no “Know Your
Customer” regulation, making it difficult for law enforcement to investigate
the trail of money moving in and out of these services.

Governments around the world are increasingly
grappling with how to regulate the quickly emerging and constantly evolving
crypto markets.

The Office of Foreign Assets Control is going
to add certain cryptocurrency addresses to its list of entities with which US
companies are not permitted to do business, according to the report, and The
Financial Crimes Enforcement Network (FinCEN) is making anti-money laundering
laws (AML) in virtual markets a global priority.

Mr Jamal El-Hindi, the head of FinCEN, said
“We will hold accountable foreign-located money transmitters, including
virtual currency exchangers that do business in the United States when they
wilfully violate US AML laws.”

“This action should be a strong deterrent to
anyone who thinks that they can facilitate ransomware, dark net drug sales, or
conduct other illicit activity using encrypted virtual currency,” he said.

GNA

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