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Crypto and Money Laundering: Some Figures

Author: Syedur Rahman  25 June 2024

Syed Rahman assesses crypto involvement in money laundering.

A series of statistics appears to shine a light on the true extent to which crypto is used for money laundering.

Nobody has ever doubted that the crypto sector has attracted, and been used by, those looking to make gains via financial crime and / or launder the proceeds. The scale of crypto’s role in money laundering has, however, been the subject of conjecture and even argument. 

But joining the dots does give an indication of the degree to which money launderers are turning to crypto.

A report from investment advisors invezz.com has said that every year an estimated 2-5% of the global GDP is laundered, which would amount to up to $5.05 trillion this year. Meanwhile, the United Nations Office on Drugs and Crime’s method for estimating money laundering volumes puts the likely total for this year at between $2.22 trillion and $5.54 trillion. 

But if we then factor in Chainalysis’ report that only $23.8 billion in crypto was laundered in 2022 – and we work with that figure for this year – it would mean that crypto is involved in just 0.47% of the expected money laundering for 2024 (using the invezz.com figure). It should also be pointed out that Chainalysis has reported a drop in the overall illegal activities related to crypto, from a 2022 total of $39.6 billion to $24.2 billion last year. 

While such figures may be far from 100% accurate, they have to be viewed as an indicator of the true scale to which crypto is being used by those involved in crime. Crypto’s role in money laundering may have, for obvious reasons, increased over the past decade. But it is still dwarfed by the part played by traditional financial systems. 

The argument, which has been repeatedly made, that cryptocurrency is the go-to tool for the money launderer does not stand up to scrutiny. If we put the Chainalysis 2022 figure for total crypto laundering ($23.8 billion) up against the estimated annual figure for all money laundering in the United States ($300 billion) or even Germany (€100 billion) the limited part being played by crypto is clear. 

Crypto has had more than its fair share of criticism for its use in money laundering. The statistics indicate that this criticism is hugely disproportionate.

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Syedur Rahman is known for his in-depth experience of serious fraud, white-collar crime and serious crime cases, as well as his expertise in worldwide asset tracing and recovery, international arbitration, civil recovery, cryptocurrency and high-stakes commercial disputes.

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