Legalization of Illicit Proceeds; What Is Money Laundering?
Contents
Summary
Money laundering serves to disguise and legitimize the proceeds of crime by presenting illegally obtained money as coming from a legitimate source.
By money laundering, the criminal converts, through money laundering, the monetary proceeds of criminal activities into funds of an apparently legal origin.
The main purpose behind money laundering is to hide illegally obtained funds, eliminate suspicions and allow their legal use.
Other motives include tax evasion, avoiding financial sanctions, and influencing important people.
Money Laundering Methods
Money laundering methods vary depending on factors such as the amount and source of the proceeds and the skills of the people involved.
It can happen in the following ways;
Online Auctions
A money launderer may create multiple accounts on the online auction platform. Then, they list the products for sale with some of these accounts, and with the other accounts, they buy these non-existent or different products and make the payment through the auction system.
Digital Currency Mixing
To disguise the source of cryptocurrency funds, money launderers use processes called “scramblers” or “drummers” to move dirty money through the same channels as clean money, making it difficult to track.
Online Casinos and Gambling Sites
In this method, they deliberately lose and win some bets to create a transaction history that complicates the tracking of funds in general.
E-commerce Platforms
They create fake online stores, then use the stolen credit card information to make purchases from them. In this way, black money traffic occurs through credit cards or bank accounts and money is laundered.
Virtual Item Trading:
Virtual goods such as skins, weapons or in-game currency can be bought and sold in online gaming environments. Money launderers buy virtual goods with illicit funds and then sell them for clean funds:
Online Investment Scams
Transactions are made on the principle of mixing clean and dirty money with investment trusts that promise high returns. After a period of regular returns, the investment collapses. In the meantime, money is laundered.
Online Charities and Crowdfunding
Criminals may organize fake charities or charity campaigns. These funds mix clean and black money through a series of transactions.
Offshore Online Banking
Black money begins to move in the international financial system with the help of accounts opened in banks of countries with loose banking regulations. These banks provide anonymity and make it difficult for authorities to trace the source of funds.
Cryptocurrency Initial Coin Offerings (ICOs)
Fake ICOs can be used to launder money. Criminals can create a fake cryptocurrency and sell tokens to unwitting investors, effectively turning illicit funds into legitimate-looking digital assets.
Organizations Related to Money Laundering
Money laundering; It is carried out by criminal organizations, criminal individuals and institutions, and fraud networks.
Examples include drug traffickers, tax evaders, and banks evading financial sanctions.
International Efforts Against Money Laundering
Money laundering is a global issue that requires international cooperation. Organizations such as UNODC, FATF, OECD and the EU are working on developing standards, sharing information and changing laws to combat money laundering.
Money laundering has been a long-standing concern in national and global efforts to combat crime.
References
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