Did you know that in 2020 the United States’ Internal Revenue Service (IRS) seized over $3.5 billion in cryptocurrency assets? You read that correctly, that is $3.5 billion and not $3.5 million, though it seems like such an impossibly outrageous amount. The reality though is that cryptocurrencies like Bitcoin, DogeCoin and Ethereum and the crypto exchanges are hotbeds for money laundering activity, simply because they are decentralized and unregulated by the powers that be.
It is so easy to launder funds through crypto you can just walk up to any Bitcoin ATM today and do in seconds what used to take months.
According to the IRS’ annual crime report, which was released last week, the $3.5 billion it seized in 2020 from crypto activity represented 93% of all the assets seized by its Tax Enforcement Unit.
I think that stat aptly proves my point above — because there are no crypto regulations on the books, the bulk of today’s money laundering is done through Bitcoin, et al. Perhaps that remaining 7% represents the illicit activity surrounding NFTs?
Joking aside, perhaps you have you heard of the Cybersecurity Unit, which was established a couple of years ago by the Justice Department? Well, the IRS also has a Cyber Crimes Unit (CCU). They have been busy too, and are about to get even busier. If you take into consideration the sheer amount of cyber criminal activities uncovered in 2020 by this relatively unknown CCU, and then combine it with the most recent headlines related to cryptocurrency and centralization, perhaps a picture starts to emerge? Maybe the Wild West days of crypto are nearly over with?
CEO of the Alacer Group. Sharing the latest news in financial crimes and best practices that enable financial institutions to prevent money laundering.