Not a Criminal: Money Launderers Choose Fiat Money Over Cryptocurrency

Feb 04, 2021 at 14:33 // News
Coin Idol
For every $1 laundered through cryptocurrency $800 are laundered using fiat money

Individuals and businesses are often cautious about cryptocurrency due to its allegedly criminal reputation. True, money launderers often take advantage of crypto anonymity and decentralization to conceal illegal income. However, facts prove that their number one choice is fiat money.

To compare, villains used cryptocurrency exchanges to launder about $1.5 bln in 2020, $2.8 billion in 2019, and $1 billion in 2018. But according to the data by the United Nations Office on Drugs and Crime (UNODC), it is estimated that the amount of money laundered worldwide in just one year using paper money and bank transfers is between 2-5% of the overall global GDP ($800 billion USD - $2 trillion USD). It is obvious that digital currency occupies a far less voluminous niche here.

A number one choice

Fiat money is actually used in money laundering 800x more than Bitcoin and cryptocurrency. The ratio of fiat to crypto ML statistics, is standing at 800:1. This simply means that for every $1 of Bitcoin transacted on the darknet platforms, $800 is laundered. Fiat remains the prepotent transaction instrument being used or preferred by villains.


Also according to a report by Europol, ML schemes discovered are mostly done using cash transfers, rather than any kind of cryptocurrency.

The National Crime Agency (NCA) has found that the total amount of money laundered using cash in the United Kingdom is about £150 bln ($250 billion USD) annually. About £4.5 billion ($6.2 bln USD) of UK property has been purchased using suspicious wealth via traditional money.

As per the report by SWIFT, the detected cases of ML via digital currencies remain comparatively small in comparison with the volumes of bank notes laundered using traditional means like using front companies, cash mules, cash business, hawala, and others. 

Therefore, based on the statistics, it is clearly seen that Bitcoin and cryptocurrency is not a big issue that should threat regulators and security agencies. The role played by BTC and other digital assets in illegal activities should not be negatively hyped by opponents of virtual coins. The blockchain and cryptocurrency industry should be regulated properly and given enough time to develop.

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