Fiat is still the preferred currency of choice for financial criminals.
There have been concerns about crypto assets being misused for criminal purposes. However, the US Treasury Department just issued something to dispel these fears.
A new report from the US Treasury shows that most financial crimes still involve fiat money, even though there are widespread concerns that cryptocurrency might be used to commit criminal acts.
Early this month, the US Treasury provided a 3-year report about money laundering, proliferation financing and terrorist financing. All of them were based upon digital assets.
And crypto detractors may believe this is all about digital assets being widely employed in these sectors.
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It’s Fiat, Not Crypto
However, traditional money and fiat currencies are often used in these situations, so they’re more likely to be of use.
The Treasury’s findings include a detailed discussion of virtual currencies, stating that both their user base and market capitalization have expanded dramatically since the previous risk assessment in 2020.
These reports however found that crime flows using fiat currencies and established networks outnumber criminal ones involving cryptocurrency.
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This information was disclosed by the US Treasury:
“The use of crypto assets for money laundering continues to be significantly less prevalent than the use of fiat cash and other more traditional means.”
The Best Choice for Crime: Crypto is Still a Good Option
According to the National Money Laundering Risk Assessment, “virtual assets” are an ever-evolving domain within money launderers’ expanding armory for concealing their finances.
It singled out DeFi and “anonymity augmenting technology” as possible perpetrators.
Virtual assets are believed to have been extensively used during the epidemic in ransomware schemes and phishing attacks.
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Shady operators could use promises of profit in the uncertain cryptocurrency market, to lure victims into divulging their personal data or infecting them with viruses.
Following an attack, the attackers could demand payment in crypto. It is both impossible and unreversible.
Chainalysis recently released a Crypto Crime Report that revealed many criminals used over-the counter brokers to make their cryptocurrencies.
OTC brokers help buyers and sellers transact on cryptocurrency exchanges.
A Staggering Amount
According to a United Nations study, money laundering has a global economic cost of between $800 billion-$2 trillion each year.
It amounts to between 2 and 5 percent of the country’s gross domestic product. Almost 90% of money laundering is still undiscovered today.
Technological advancements led to the creation of better tools. These advancements are still used by criminals to get their dirty money.
Both government agencies as well as fintech companies use technology simultaneously to detect transaction characteristics and expose fraud.
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