A new report shows that criminals still prefer fiat over crypto for their illicit activity
A recent detailed risk assessment report from the US Treasury Department finds that cash, not cryptocurrencies, is the preferred money laundering technique for criminals and organizations.
Three individual reports investigating money laundering, terrorist financing and proliferation financing detailed the current landscape in which criminals obtain, launder and transfer funds locally and overseas.
The Treasury report highlights the obscurity, resilience, and pervasiveness of cash as a means of payment as the main reasons why it’s still the preferred method of laundering illegal funds. The report also highlights that using virtual assets remains well below the use of fiat currency for money laundering:
“Criminals use cash-based money laundering strategies in significant part because cash offers anonymity. They commonly use U.S. currency due to its wide acceptance and stability.”
Transporting US dollars in bulk remains a popular way to launder illicit earnings within and outside the country. Cash is commonly transported across borders and deposited into foreign banks.
The report documents that 1,480 confiscations of currency and monetary tools were conducted in inbound cash movements of $18 million. Authorities also seized 1,010 outbound currency movements in 2023, totaling about $53 million.
While the Treasury acknowledges that using virtual means to launder money is far less ideal than using fiat currency and other traditional methods, cryptocurrencies are still being mishandled in cases concerning drug trafficking, ransomware, human trafficking, scams and other criminal activities.
Decentralized finance (DeFi) protocols were also marked as an emerging method for transferring and laundering illicit profits. Cryptocurrency mixing is another route criminals take to move funds while hiding the amount, source and destination involved in transactions.
