Money laundering and Digital cryptocurrency

Money laundering has always been a part of our economic society. As long as people remember, the word itself can be traced back to the beginning of the 20th century. At that time, the daughters rented a laundromat, providing a seemingly inconspicuous and legal surface for money laundering crimes. Since then, money laundering has developed as fast as the law to curb money laundering.

Therefore, with the digitalization of business, it is not surprising that money laundering has entered the dark waters of cyberspace. Similarly, in the past few years, the popularity of cryptocurrency as a means of money laundering has increased exponentially. Its illegal use has developed from a means to a comprehensive black network crime, and has developed into major cyber crimes. It has become the main means of network crimes of various scales.

North Korea is one of the most famous entities that are notorious for institutionalized cybercrime. At the recent infamous high point, some people speculate that nearly 10% of North Korea’s $81 million cash and $250 million cryptocurrency income comes from cybercrime. In 2018, criminal entities transferred $1 billion to Bitcoin. It will rise to 8 billion dollars in 2019.

The crypto world is changing a lot, but how do they do it?

After all, these are international crimes, You will expect the ability of other countries in the world to determine the behavior of isolated wrong travel. The answer is simple: most cryptocurrency markets are not managed by central institutions, which makes the flow of funds complex, and the complexity of tracking it ultimately exceeds the time and resources available.

The anonymity of encrypted account transfers makes it easier for transactions or cryptocurrency exchanges to provide security for a few days. And you have a powerful laundromat that washes all the dirty money. Cryptocurrency exchange is supported by blockchain technology. Essentially, it is a digital record of transactions copied and distributed across the entire network. Therefore, these transactions can be controlled by users themselves without the participation of a third party.

Although it is difficult to find the identity of a specific cryptowallet owner, all network participants can use transaction records that record the date, time and payment amount of the sender’s and receiver’s accounts. Criminals use a variety of sophisticated methods to dilute the reliability of these records. The simplest method is also called appeal chain. Through thousands of cross transactions, funds can be quickly and automatically transferred from one Bitcoin wallet to another, which can not only hide the source of funds, but also reduce the risk of triggering any alarm. Another classic money laundering method is to manually turn transactions into crimes.

Using this method, funds are usually sent through multiple wallets of other users. The third is the next legal crypto cash containing illegal funds. Perhaps the most popular method is chain skipping. This is similar to using the chain of appeals. This approach involves the transfer of funds from one bullet to another.

However, the difference here is that the funds are transferred from Bitcoin to other more anonymous cryptocurrencies through various cryptocurrencies and login chains.

The idea is to let investigators lose track of transactions. When their attention leaves the transaction chain, they will convert it into Bitcoin as a mobile currency.

North Korea, which is considered to be a state supported cyber criminal group, jumped cryptocurrency from one currency to another, and was eventually cheated by a Bitcoin broker in China to sell stolen goods by jumping chains. They successfully converted the stolen cryptocurrency of 250 million dollars into a clean currency, but did not find it in real time. However, with the progress of blockchain monitoring methods,

Money laundering through cryptocurrencies is no longer an easy thing to hear. The regulatory authorities may have been powerless for a time, but with years of experience in cryptocurrency investigation, it is easier and faster to detect suspicious patterns in cryptocurrency transactions.

But the main obstacle is cash itself. No matter how complex the trading system is in the end, capital must be mediated. Only in this way can the authorities track the source of the complex transaction chain and reach the destination. This is usually the middleman who converts Bitcoin into two real currencies. Because these currency exchanges are easier to identify and fewer than millions of encrypted transactions. Therefore, it is possible for the authorities to track a series of transactions here. In the end, it is only a matter of time before criminals are found in regulated jurisdictions such as the United States, Japan and the European Union. Since it is already necessary to confirm the user’s identity, money laundering becomes more difficult. It is said that anonymous cryptocurrencies still exist. This helps to transfer undiscovered funds. They don’t go anywhere when they are here with DarkWeber. May require forever hidden exchange of funds. Where there is demand, there is supply.

Reference documents:

• Chohan, U.W., 2018. Cryptocurrency theft and exchange closure. Available on SSRN 3131702

• Maddy, Robert Stanley. Utica College, in 2017, unfairly criticized the research on the history of cryptocurrency and related risks and threats.

• Seo, J., Park, M., Oh, H. and Lee, K. October 2018. Bitcoin online money laundering: a hybrid service perspective. International Conference on Information and Communication Technology Convergence (ICTC) 2018 (1403-1405 pages). IEEE.

• Haffke, L., Fromberger, M. and Zemmerman, P., 2019. Cryptocurrency and money laundering prevention: defects and solutions of the fifth money laundering prevention guide (EU). Journal of Banking Supervision, 1-14 pages.

• Gruji ć, M. And Š Ikman, M.2020. Emerging Markets Partial Registration Form and Money Laundering Certificate< Economic Daily, 18 (32), 175~10.