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Illegal Tides

Tracing Money Laundering Patterns in Cryptocurrency

Cryptocurrency is everywhere, and the use of cryptocurrency is a new attraction. It is affecting

the countries’ economies with all its positive and negative might. Why? Because of the two main

reasons. First, ease of use and second, anonymity. Cryptocurrency offers a combination of

anonymity, ease of use and the ability to circumvent international borders and regulations, in

essence, to launder the ill-gotten proceeds. Cryptocurrency money laundering cases are

challenging to track down and control for the authorities. The mechanisms are mostly run

anonymously, which means there is no need for identified information like name, national identity

or address to conduct cryptocurrency transactions.

Illegal Tides

Money laundering trends in crypto

Money laundering has been an issue for regulatory firms and law enforcement agencies for a long
time. The advent of cryptocurrency is no different from this deep-rooted issue. Governments are
confronting the issue of tax evasion. The taxation departments fail to identify and tax the bulk of
funds being generated in cryptocurrency markets. The users of cryptocurrency use this convenience of crypto’s anonymity to conceal their earnings and escape taxes. This is why antimoney
laundering firms have happened to be playing a key role in curtailing this issue.

Anti-Money laundering enforcement

The Anti-Money Laundering Act, also known as the AML Act, is a collection of legal rules and
guidelines designed to inhibit and identify instances of money laundering. Money Laundering
Trends in Crypto keep on varying as the measures are being taken by the anti-money laundering
(AML) legislation.


  • The AMLA reiterates that financial institutions should implement reasonably designed riskbased
    programs that “direct its resources to its higher-risk customers and activities,
    consistent with the risk profile of a financial institution.”
Concealing Illicit Transactions in Cryptocurrency

Concealing Illicit Transactions in Cryptocurrency: A Growing Trend

Mixers, tumblers, and foggers

The usage of “mixers” or “tumblers” is a hot trend used by digital money laundering criminals. In
this activity coins of multiple users are mixed, concealing the original source of the funds. The
transactions become anonymous hence hard to be traced. Funds are pooled, mixed, and redistributed to anonymous participants mostly online. Though it is not actually an illegal act but
is the most desired hub of the cryptocurrency money launderers. Some of the frequently used
bitcoin tumblers are YoMix.IO, Mixer, Unijoin, etc.

Privacy Coins

Another trend is the use of “privacy coins” such as Monero, Zcash, and Dash. These
cryptocurrencies are devised to be completely anonymous and untraceable, making them a
tempting option for criminals searching to launder their money. Unlike Bitcoin, which has a public
ledger that can be used to track transactions, privacy coins offer complete anonymity, making it
virtually impossible to trace the flow of funds.

The BitMEX Case of 2020 and its Implications for Cryptocurrency Oversight

One notable case involved a cryptocurrency exchange called BitMEX. In October 2020, the U.S.
Department of Justice charged BitMEX, its owner, and other involved individuals with violating
the Bank Secrecy Act by failing to establish, implement, and maintain an adequate anti-money
laundering (AML) program on the platform. This case underscored the risks associated with
cryptocurrencies and digital money laundering.


The ever-increasing cryptocurrency money laundering is resulting in serious issues like tax
evasion, terrorism support, underground illegal activities, illicit cross-border transactions, and
much more. Law enforcement agencies and governments must combat these issues with the help
of anti-money laundering agencies (AMLs). AML’s continuous research and strategic endeavors
offer great help to cherish the fruits of the cryptocurrency market or digital money markets with
optimum security and reliability. They better optimize the use of cryptocurrency money laundering
typologies. Innovative ways hand in hand with legislation for more vigilant activities is a profound
aspect of an AML. Despite the complexities, the hopes are high in regard to smoothing out the
rough edges of this dynamic landscape of financial crime.

Have Any Question?

To enquire about insourcing AML Compliance Department you can contact us


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