Money Laundering and Cryptocurrency

One of the main evils of society is obviously crime. And like any citizen, criminals also have to make ends meet, don't they? That is why the fruits of their criminal activities must be protected at all costs, but how do they do it? Well, that's what is known as “money laundering” for.

Money laundering is a process by which the origins of profits derived from illegal operations are concealed, making them appear as if they were born from completely legal activities. Now, what types of crimes are the most common in which money is laundered? Well, the most common are: terrorism, drug trafficking, organized crime, piracy, human trafficking, cybercrime, arms trafficking, among others.

In the same way, to better understand money laundering, we must know its three stages: placement, layering and integration.

PLACEMENT

The placement consists of all the fruits of these illegal operations being entered into the financial system, either through bank deposits, transfers, investments, etc.

STRATIFICATION

Already with these profits within the financial system, they proceed to move them through various transactions, in such a way that they are extremely complicated to trace, so that the authorities cannot identify their origin. Some examples are: bank transfers, buying luxury goods (mansions, watches, cars), buying cryptocurrency on decentralized exchanges, etc.

INTEGRATION

After so many movements, these funds are reinserted into the economy, already appearing to come from legal acts, such as: sale of the goods that were acquired during the stratification phase, a network of shell companies, etc.

This is, in a nutshell, how money laundering works. The truth is that it is a super broad topic and much more complex than what was explained in previous lines, but to understand it I would need much more than this simple blog.

However, having mentioned cryptocurrencies, it is very important to highlight their relevance and the role they play today. As we already know, these virtual assets are, speaking of Mexico (although the same happens in many other countries), very poorly regulated, so finding ways to use so many loopholes to their advantage has been the task of criminals for a long time.

To reiterate, as they are so poorly regulated, it turns out that criminals are starting to use cryptocurrencies as a payment method, so that in the end they make profits and are extremely difficult to track.

A clear example is the following: Let's imagine that one day you open an email that supposedly belongs to your grandmother, but in reality it is an email that, when opened, installs a virus on your computer, a “ransomware”, a virus that hijacks all the data you have stored on your computer and even in the cloud, the only way to release them is to pay the hacker “X” number of cryptocurrencies.

The same thing happens on the “deep web”, where criminals are paid in crypto to do their work, and you can imagine what kind of work I'm talking about.

It is urgent that authorities, both national and international, regulate everything related to cryptocurrencies and blockchain, so that there is no possible way for criminals to get away with it.

Ps. So that you don't have any doubts, I leave you the following video:

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