Cryptocurrencies represent the vanguard of new finance. However, recently, the mafia has started to be using it for illicit trafficking.
Bitcoin, in particular, has become a preferred medium for these underworld activities, as it allows you to exchange money anonymously.
Information technology has already made use of social media in the world of crime. Now with the cryptocurrencies, the universe of digital currencies is also breaking into money laundering and illegal International Money Transfer.
Two operations that, if done with Bitcoin, allow them to evade traditional systems and facilitate mafia clans or, more generally, those who conduct illegal activities to act with extra protection.
Yes, Bitcoin and cryptocurrencies are greater freedom for everyone (because we are not tied to the banking system) but it also offers greater freedom for those who commit crime.
So let’s see what’s happening and what we should do.
MONEY LAUNDERING WITH CRYPTUS
Money laundering has always been criminal activity. The money obtained illegally is put into circulation so as not to trace it back to the source and therefore to the illicit activities that originated the gain.
It is a very complex crime to prove, for this reason, the mafia uses different strategies to evade the authorities.
For example, if a clan sells drugs and has collected a lot of cash at the end of a month, the latter cannot be put into a current account. They would be discovered immediately.
Even keeping mountains of paper cash for them isn’t safe. They either need to reinvest it in other operations by buying other commodities, or it becomes difficult for them to use large sums of money.
There are activities in which dirty money is laundered without anyone noticing. This is not easy.
With the advent of cryptocurrencies, this recycling process is greatly simplified.
With Bitcoin and other digital currencies, dirty money can be converted into a currency that is used on the internet leaving no trace. Once the Bitcoins have been purchased, it is not possible to trace the identity of the owner of the currency.
Furthermore, to buy Bitcoins you only need a computer and an internet connection. You do not need a current account or the presence of intermediaries as happens in the traditional market.
This feature makes it much easier, faster, and safer to buy Bitcoins. An aspect that has not escaped the clans of organized crime.
According to a recent study by the Financial Markets Supervisory Authority (ESMA), money from illicit activities is massively laundered through cryptocurrencies. Around 5% of cryptocurrency trading volume is related to money laundering.
ESMA, however, is not the only authority that has made this finding. According to a recent report by the Financial Action Task Force (FATF) Financial Intelligence Unit (UIF), the volume of cryptocurrency trading related to money laundering amounts to approximately $2 billion per year.
The problem is the authorities have not yet found a solution to combat this phenomenon effectively.
ILLEGAL INTERNATIONAL MONEY TRANSFER WITH CRYPTUSES
Another action prohibited, but with Bitcon and other digital currencies becomes simple and untraceable is sending money anonymously and without intermediaries.
This feature makes it much easier, faster, and safer to send money overseas by bypassing authority checks.
According to the FATF, the volume of exchanges in cryptocurrencies linked to illegal International Money transfers amounts to about 1 billion dollars a year.
Even in this case, the authorities have not yet been able to find an effective solution to combat this phenomenon.
Among other things, being able to send money to anyone and anywhere without being detected favors the international traffic of goods …
TRAFFIC IN ARMS AND DRUGS
Cryptocurrencies are not only used for money laundering. As we have already said, it can be used to exchange money anonymously on the internet. An aspect that makes it very easy to carry out illegal operations.
It is estimated, that about 4 billion dollars of illicit exchanges are carried out through Bitcoin per year.
The most widespread illegal trafficking is that of arms, drugs, and child pornography. In many cases, the sellers of these goods use Bitcoin to receive payments from their customers.
In other cases, cryptocurrencies such as Monero and Zcash have been used as they offer an even greater level of anonymity.
According to a recent report by the blockchain analysis firm Chainalysis, the volume of cryptocurrency exchanges linked to drug trafficking amounts to about 600 million dollars a year.
As for arms trafficking, it is estimated that Bitcoin is used to buy and sell around $100,000 worth of weapons per month.
As far as child pornography is concerned, according to a recent study by the British police, 90% of payments for this type of illegal content are made through Bitcoin.
THE SOLUTION? REGULATE CRYPTOCURRENCIES!
At this point, the question arises: how can money laundering through cryptocurrencies be effectively combated?
According to ESMA, the solution is to regulate Bitcoin and other cryptocurrencies.
In this way, anonymous exchanges would be made more difficult and greater visibility would be given to the authorities on the flow of money.
At the moment it does not appear this solution is on the agenda. In the meantime, the mafia continues to do good business thanks to cryptocurrencies.
I am convinced we will have to wait a few more years before Western governments, such as Europe and the United States, take charge of this problem.
At the moment there is not even a minimum regulation of these new digital currencies based on the blockchain.
Guaranteeing their lawful use is an even more complex issue that will be dealt with at a later time.
In the meantime?
The authorities and governments will have to fight against crime and the mafia (such as the Italian ones) in the physical world by tracking down their criminal operations.
Even the Bitcoin-based exchange is closely linked to something illegal as selling drugs, lace in Italy, selling weapons, and trading illegal videos online.
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