Money Laundering using Cryptocurrency

Cryptocurrency opponents have long argued that money launderers are using digital currencies for money laundering. However, the recent turn of events points somewhat in the different direction. While no one can confirm or deny the use of cryptocurrency in money laundering. The number of fraud cases involving traditional methods of banking exposed is very high.

Money Laundering in Japan

According to reports, Japanese police received reports on 669 cases of suspected money laundering linked to cryptocurrencies. The cases suspected are between April and December. The reports come directly from the cryptocurrency exchange operators themselves. And these exchanges are obligated under Japanese regulatory measures to report suspicious transactions which may signal money laundering. The government has established this measure to prevent criminal transactions. However, it is important to note that the overall number of suspected money-laundering cases in Japan stands at 400,043. This means that cryptocurrency cases reported during those 9 months only accounts for less than 0.17 percent of all suspected money-laundering cases. The most reports came from banks and other financial institutions, totalling 346,595 cases. Also, credit card companies with 15,448 cases and credit unions at 13,259 cases are second and third respectively.

European Scenario

Meanwhile, the scenario in Europe is still bad for cryptocurrencies. With the high number of fraud cases coming into the limelight, cryptocurrencies still have a bad name in Europe. According to the European Union Agency for Law Enforcement Cooperation (Europol), money launderers trade $4.1 to $5.5 billion of criminal money using cryptocurrency in Europe alone.

Rabobank’s news made headlines last week in Europe. Rabobank, a major Dutch bank had refused to service Bitcoin business due to “compliance risks”. The government has now fined the same bank $369 for money laundering.

PNB Bank in India

Also read: India’s stand on cracking down crypto continues

Meanwhile, India’s Punjab National Bank’s $1.8 Billion fraud shook the masses of India. Nirav Modi, a jeweller, his maternal uncle Mehul Chinubhai Choksi, and other relatives defrauded PNB of about Rs 114 billion. After Nirav Modi case, PNB bank also reported Rs 6.2 mn Mudra loan fraud. Senior branch manager at PNB’s Barmer branch in Rajasthan dishonestly and fraudulently sanctioned, disbursed 26 Mudra loans. On one hand, there is India’s opposition to the cryptocurrency trading, while on the other hand, the common people are being looted by taking advantage of the flawed traditional ways of trading.


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