Money Laundering in Cryptocurrency Business

Money Laundering in Cryptocurrency Business

 Many coins of various cryptocurrencies

Cryptocurrency is a popular digital currency, designed to work as a medium of exchange, without need for government or bank interference in its transactions.

Crypto has been adjudged by some to be a form of investment, while to some it is the same as gambling. This comparison between crypto and gambling, was as a result of both activities sharing key element of “staking something of value/money, on an uncertain outcome”.

Also, we now have crypto casinos, where players can create account, deposit funds and play games and make their winnings. The only difference to regular casinos, however, is that crypto is used as primary currency, as opposed to money.

Cryptocurrency has been hailed as a more transparent financial platform, because it is considered to be more secure, and trades round the clock unlike banks. However, crypto transactions, can also be volatile and high risk. One of the negative sides to it, is that it can give rise to money laundering.

Money Laundering is an activity that has been flagged in gaming/lottery operations worldwide and it is also being flagged in crypto-currency transactions. Here are some of the red flag/signs that can signal money laundering.


  1. Volume of Transactions
    one of the most significant things that can signal money laundering in cryptocurrency is abnormal large transactions. Volume of wallet transfers that exceed the typical transaction amounts for a particular crypto currency, can be a sign of criminal activity. Money launderers may use large transactions to move money quickly, and in bulk without attracting attention.


  1. Number of Transactions
    Frequent transactions can also be a tipping sign of money laundering in cryptocurrency. Money launderers may use cryptocurrency to move money quickly and frequently, to avoid detection. Frequent transactions that are larger than typical transaction amounts, can be a sign of criminal activity.


  1. Compound Transactions
    Compound crypto-currency transactions that involve multiple accounts, can be a sign of money laundering. Money launderers may use multiple accounts or cryptocurrencies to move money around. Therefore, it is essential to be cautious of complex transactions that involve multiple accounts or cryptocurrencies.


  1. Geographical Distance between Transactional Parties
    Another tipping sign for money laundering in cryptocurrency, is the geographical distance or proximity between parties involved in a transaction. Money launderers may use cryptocurrency to move money across borders quickly and anonymously. Therefore, transactions that involve parties in different countries or jurisdictions should be carefully examined.


  1. Anonymity of Transactions
    Cryptocurrency has become a popular tool for money laundering, due to its anonymity and decentralized nature. It provides anonymity more than other payment methods, because most transactions cannot be directly linked to an individual. This makes it a red flag for money laundering, as money launderers may use cryptocurrency to avoid detection by law enforcement.



Is there a need for Cryptocurrency to become subject to increased regulation in the future; absolutely yes! Crypto-currency exchanges and other crypto-currency-related businesses are required to comply with all relevant regulations to prevent money laundering.

Paying attention to red flags like, proximity between a transaction and its ultimate source, location of transaction and where it originated from e.g. “is it a questionable gambling site, dark-net marketplace” etc. can better prevent money laundering, and protect society from the disturbing consequences, of this serious crime.


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