Table of Contents
- Money Laundering Method 1: Online Marketplaces
- Money Laundering Method 2: Peer-To-Peer Payments And Messaging Apps
- Money Laundering Method 3: Gift And Prepaid Cards
- Money Laundering Method 4: Cryptocurrencies
Do you want to know how many money laundering methods are? In this, post we will briefly explore them so that you know those methods exist and you have a rough understanding of them.
These are the money laundering methods:
Money Laundering Method 1: Online Marketplaces
The first method involves online marketplaces. Many of online marketplaces have emerged in the last few years, allowing individuals to earn additional income from their resources.
Whether it’s sharing their accommodation, their ride, or some skill they possess, the sector is exploding.
As a result, there has been a rise in micro-merchants, individuals who offer their products or services through an online marketplace.
It all adds up to a huge economy with massive transaction volume and thus a tempting target for money launderers.
For example, money launderers make fake bookings and share the revenue with the host.
In another example, money launderers retain IT freelancers for alleged IT development services, which are never being developed in practice.
Money Laundering Method 2: Peer-To-Peer Payments And Messaging Apps
The second method involves instant messaging. With the growth in instant messaging and direct communication, quite a number of mobile apps now offer peer-to-peer payments.
For example, WeChat and Facebook’s Messenger Chat services have integrations with PayPal, MasterCard, American Express, TransferWise, and Western Union.
All these accounts and transactions make for another sweet target for money launderers.
Money Laundering Method 3: Gift And Prepaid Cards
The third method involves gift and prepaid cards. Gift and prepaid cards are another way for criminals to create untraceable money. hey quickly purchase prepaid cards in bulk using a stolen debit or credit card. They can then sell cards for cold, hard cash.
If they aren’t caught in the act of using the stolen cards, it’s very difficult to trace these culprits as the prepaid cards are traded face to face to avoid any record.
Money Laundering Method 4: Cryptocurrencies
The last method involves cryptocurrencies. Cryptocurrencies are digital currencies designed to work as a medium of exchange, offering another avenue for money launderers to clean their money.
According to a report from the US Drug Enforcement Administration, China-based manufacturers were trying to avoid capital controls by accepting bitcoin for their trading operations.
The Department of Justice stated, “The increasing use of OTC bitcoin brokers, who are capable of transferring millions of dollars in bitcoin across international borders, as part of a capital flight scheme is expected to continue to intertwine criminal money laundering networks with capital flight.”
The Financial Action Task Force points out the significant money laundering risk that cryptocurrencies impose, especially referring to the anonymity provided by the trade in virtual currencies on the internet and the limited identification and verification of participants.
In today’s fast-paced and agile environment, a number of rather unconventional money laundering have emerged, which leverage the opportunities of modern technologies, unfortunately, for criminal purposes. Online Marketplaces, Peer-to-Peer Payments and Messaging Apps, Gift and Prepaid Cards, and Cryptocurrencies are four unconventional methods of money laundering.
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