Home » Blog » 4 Unconventional Money Laundering Methods

4 Unconventional Money Laundering Methods

by | Feb 21, 2021 | Financial Crime Academy, Money Laundering (ML)

Do you want to knowhow many are there money laundering methods? In today’s fast-paced and agile environment, a number of rather unconventional money laundering have emerged, that leverage the opportunities of modern technologies, unfortunately, for criminal purposes.

 In this post we will just briefly explore about them so that you know that those methods exist and that 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. A number of online marketplaces have emerged in the last few years, allowing individuals to earn additional income off of 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.

In one 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.

This includes for example, WeChat, Facebook’s Messenger Chat service has 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. Using stolen debit or credit cards, they quickly purchase prepaid cards in bulk. They can then sell for 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. Cryptocurrenciesare digital currencies that are designed to work as a medium of exchange, offers 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”.

Know more at Financial crime Academy

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.

Serious about fighting financial crime?

Sign up here and join the Financial Crime Academy Community to receive the latest updates

Hidden Content