Laundering Techniques Favor Cash Not Crypto, Reports Say

According to a recent report from the US Treasury Department, criminals continue to favor traditional cash over cryptocurrencies for laundering money and conducting illegal transactions. This assessment is derived from three reports focusing on money laundering, terrorist financing, and proliferation financing. These documents shed light on how criminals across the globe manage, launder, and move illicit funds.

The Treasury’s findings underscore the enduring appeal of cash due to its anonymity, widespread acceptance, and stability, especially U.S. currency. Despite the growth of digital currencies, cash’s physical nature and the difficulty in tracking its movement make it the top choice for laundering activities. The report elaborates on the substantial volume of U.S. dollars smuggled internationally and the strategic placement of these funds in foreign banking institutions to clean dirty money.

In 2023 alone, U.S. authorities intercepted 1,480 inbound cash movements totaling $18 million and halted 1,010 outbound movements, amassing around $53 million, evidencing the significant scale of cash-based money laundering.

While the Treasury acknowledges the use of cryptocurrencies in illegal activities like drug trafficking, ransomware attacks, human trafficking, and scams, the volume of such activities involving digital currencies pales in comparison to those conducted with fiat. Nevertheless, the report identifies decentralized finance (DeFi) protocols and cryptocurrency mixing services as emerging techniques that criminals use to obscure the origins, amounts, and destinations of illicit funds.