SWIFT, an international association for financial communications between banks and other organisations, says cryptocurrencies are not widely used for money laundering or other illicit activities.
In her report, SWIFT (Society for Worldwide Interbank Financial Telecommunication) states that cases of money laundering through cryptocurrencies, and digital assets remains significantly lower compared to cases involving cash. According to the organization, fiat money remains the preferred currency for criminals for money laundering and other financial crimes, a view shared by the organization. Chainalysis, an intelligence firm blockchain which has issued several research reports on the subject.
The financial organisation conducted research with a focus on studying how criminals extract and “clean” money after committing a financial crime. To achieve this, SWIFT had the support of the company BAE Systems, who participated in the research and writing of this report. Thanks to this collaboration, both companies were able to determine that one of the main techniques, and the preferred one by most cybercriminals, to extract funds after a successful attack is the fiat moneySWIFT is therefore focusing on developing new cybersecurity controls to minimise the incidence of these financial crimes.
It may interest you: Mexico: the banking G7 is the most wanted for money laundering
Common methods for money laundering
As SWIFT is the organisation responsible for communications between banks and financial institutions worldwide, which carry out millions of transactions a day, the organisation set itself the goal of knowing what happens to stolen money after a cybercriminal successfully attacks. In order to determine the destination of stolen funds, SWIFT considers it essential to know which methods and techniques are most commonly used to extract and "clean" the money that cybercriminals use, preventing the origin and destination of these funds from being traced.
In this regard, the organization states that although commercial banks are not an easy target for these financial crimes, they are the most sought after because they can facilitate direct access to information, data and stored funds. According to the research, cybercriminals use cash to extract illegal capital, as well as shell companies and businesses that serve to hide the origin and destination of these funds.
To understand this process, SWIFT clarifies that money laundering is considered when two or more people or organizations interact with each other to exchange money, in order to obfuscate its origin, ownership and subsequent destination, and integrate it into the traditional financial system as "clean" money.
Cryptocurrencies and money laundering
In relation to the use of cryptocurrencies in money laundering activities, the organisation states that the cases identified with digital assets continue to be relatively small compared to the volumes of money laundered through the traditional methods mentioned above. However, SWIFT points out that there are cases in which cybercriminals transform stolen money into cryptocurrencies in an attempt to obfuscate its origin and use it more freely.
Similarly, although the involvement of cryptocurrencies in money laundering cases is currently quite low, SWIFT clarifies that the characteristics of several cryptocurrencies present in the market can be attractive to cybercriminals.
“The large number of cryptocurrencies that offer greater anonymity, as well as services such as mixers that help obfuscate the origin of funds by mixing them with other cryptocurrency funds, may increase the attractiveness of cryptocurrencies for these purposes.”
With its statements, SWIFT can place special emphasis on privacy-focused cryptocurrencies, such as Monero (XMR) y Dash (DASH), cryptographic services like Wallets Of privacy, Wasabi wallet y Samourai Wallet, and cryptocurrency mixers like the coinjo.
Security strategies
To minimise the incidence of financial crime, SWIFT aims to develop new cyber tools that will improve the exchange of information and prevent money from being stolen even when a cyber attack is successful. The company is developing a security programme for customers and users (CSP), which seeks to provide the tools and information necessary to establish a framework with authentic controls that minimize the occurrence of financial crimes, especially money laundering.
Finally, the report notes that it does not take into account the destination of physically stolen money or other forms of crime, such as attacks on ATMs, bank card cloning, identity theft, among others.
About SWIFT
La Society for Worldwide Interbank Financial Telecommunication (SWIFT) is an international organization that links the communications of thousands of financial and banking institutions in more than 204 countries around the world. This organization operates 24 hours a day, 7 days a week without interruption to ensure the transmission of billions of payment orders that are made every day.
Continue reading: Market Intel, a portal for the provision of data and information designed by Chainalysis
