Money laundering techniques in the cryptocurrency world

Money laundering techniques involving cryptocurrencies are often complex and constantly evolving.

Some of them include:

Mixing and Tumbling

These services mix users' transactions with other users' transactions to make it harder to track money.

The mixed transactions are returned to the user's wallet as "pure" cryptocurrency, the origin of which is difficult to trace.

P2P (Peer-to-Peer) exchange platforms

P2P exchange platforms allow users to exchange cryptocurrency directly with each other, thus avoiding regulated exchanges and reducing the possibility of tracking.

Privacy Coins

Privacy coins, such as Monero or Zcash, are cryptocurrencies that have been designed with privacy in mind.

These cryptocurrencies usually provide more anonymity than Bitcoin, which makes them attractive to money launderers.

Complex Transaction Chains

Money launderers often use complex transaction chains in which money moves between multiple wallets and different cryptocurrencies.

The more complex the transaction chain, the more difficult it is to trace the origin of the money.

Decentralised Financial Institutions (DeFis) and Exchanges (DEXs)

Decentralised finance and exchanges are increasingly popular in the cryptocurrency community and, as these platforms are often less regulated, they can be exploited by money launderers.

These techniques all pose challenges for regulators, who need to find ways to prevent money laundering using cryptocurrencies.