Crypto Is Too Often Used for Money Laundering, According to Australian Authorities

According to senior executives at Australia's Transaction Reports and Analysis Centre (AUSTRAC), cryptocurrency is now a standard tool in the “money laundering tool kit,” with criminals routinely employing digital currency technology to launder money and keep it hidden from authorities. Australia's head of intelligence, John Moss, made the following claims in a recent interview:

We are now seeing more traditional money laundering being displaced into cryptocurrency, particularly to send money offshore.

Chainalysis, a blockchain analysis firm, recently claimed that Russian paramilitary groups had received roughly $2.2 million in cryptocurrency this year alone. This money has been used to buy weapons and other items to fund and bolster the Russian side of the conflict. A clarification from Moss:

This shows how easy it is to use crypto as a fundraising source, and when you mix it with social media, you get a big reach. You’ve got a technology that’s easy to use, and if you’re flexible in the type of cryptos you take, you can do quite well out of it.

AUSTRAC's national manager of intelligence operations, Michael Tink, added his two cents:

We have seen evidence of Australians sending money to offshore cryptocurrency accounts linked to al-Qaida [and] ISIL, and this is largely organizational support for travel, training, the salaries of fighters, and uniforms. It doesn’t take a lot of money to have an impact on a terrorist organization in a conflict zone, and small amounts of money can buy weapons and result in attacks, so it’s still a significant risk.

Many alleged criminals and would-be aggressors reportedly use automated teller machines (ATM) to access digital currency to acquire funds. Moss worries that these machines will pave the way for a global criminal underworld. What he said was:

These machines are not seen in places like the UK. When you look at the reporting, you see lots of fraud victims. Very vulnerable people put large amounts of cash into these ATMs, which is essentially immediately gone offshore.

Tink added that converting cryptocurrency to cash at ATMs is a common first step in making illicit purchases and deals. After mentioning:

One of the key vulnerabilities for a crime group laundering money is the placement stage of the money-laundering cycle, so that’s trying to get cash into cryptocurrency. [These ATMs] are a good way to do that. There is a perception that if you are putting money through a hole in the wall, or a box in a shopping center, that it will be more anonymous.