Criminals Using Technology for Money Laundering
A recent report by Europol has revealed that criminals are increasingly utilizing technology for illicit transactions. While emerging technology has many positive impacts, criminals are using it to finance their activities. The report focuses on the use of technology for money laundering purposes by criminal organizations, highlighting that nearly 70% of criminal networks in the EU employ basic money laundering techniques. Some criminals also engage with professional money laundering networks or utilize underground banking systems. The report also mentions the use of machine learning, artificial intelligence, and deepfake technology for financial and economic crime. Criminals have even turned to chatbots like ChatGPT for online fraud.
Crypto Transactions Represent a Small Percentage
The report also delved into the use of Web3 technologies, including cryptocurrencies, decentralized finance, non-fungible tokens (NFTs), and the metaverse for criminal activities. However, the report noted that crypto transactions still represent less than 1% of the overall transaction volume, indicating that criminals are hesitant to use crypto due to successful law enforcement seizures. Advances in investigation techniques have helped detect suspicious transactions and identify actors involved in illicit activities. Several EU member states have seized crypto accounts and codes on cryptocurrency exchanges as proceeds of crime. Recent operations by Europol and other law enforcement agencies have resulted in the seizure of millions of dollars worth of crypto.
Hot Take: Criminals Embrace Technology, But Crypto Remains a Small Part of Their Operations
While criminals are quick to adopt and exploit emerging technologies for their illicit activities, Europol’s report suggests that they have been less inclined to use cryptocurrencies for money laundering. The report highlights that criminals primarily rely on basic money laundering techniques, professional money laundering networks, and underground banking systems. This hesitation to embrace crypto can be attributed to recent successful law enforcement operations and seizures of illicit cryptocurrency. Although Web3 technologies have opened up new avenues for criminal activities, crypto transactions still represent a small fraction of the overall volume. The decline in illicit crypto flows and the seizure of significant amounts of crypto demonstrate that law enforcement agencies are making progress in tackling crypto-related crimes.
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