February 23, 2024

Over the years, many within the financial sector have believed that Cryptocurrencies have been the critical facilitator of money laundering. However, a recent report from the United States Treasury Department indicated otherwise.

The department’s detailed risk assessment report revealed that using cash in money laundering surpasses cryptocurrencies. According to the report, criminals and several organizations prefer using cash for illicit transactions.

Use Of Cash For Money Laundering Surpasses That Of Cryptocurrencies

The US Treasury Department released three reports indicating the present trend in terrorist financing, money laundering, and proliferation financing. The details highlighted how criminals and some entities accumulate, launder, and transfer funds domestically and across the border.

According to the reports, cash remains the primary preference for bad actors and crime-related organizations for transactions. 

The Treasury noted that cash’s anonymity, stability, and universality as a payment option favours its usage. So, many people and organizations use cash to complete money laundering and illegal transactions.

Further, the report noted that using digital assets still applies to money laundering. However, it’s much below that of fiat currencies. Moreover, the department disclosed that the use of the US dollar is higher among other fiats. This is because the dollar has many international transactions. 

A part of the report stated:

Criminals use cash-based money laundering strategies in significant part because cash offers anonymity. They commonly use US currency due to its wide acceptance.

Additionally, the report revealed that massive cash smuggling remains the top method for moving US dollar banknotes. The activities involve the laundering of illicit funds both inside and outside the country.

The criminals mainly depend on cash transportation and deposits into foreign bank accounts across borders.

Also, the report showed that the authorities seized 1,480 currency and monetary instruments regarding inbound movements of funds in 2023. The total transfers amounted to $18 million.

However, outbound currency and money seizures were about 1,010 last year, totalling almost $53 million.

Report Notes Increased Use Of Private Aircraft In The US For Cash Smuggling

Further, the report provided information regarding cash smuggling within and outside the US borders. It revealed the wide use of US highways for cash transportation tied to domestic criminal activity.

Surprisingly, the use of private aircraft in smuggling bulk cash is on the increase, according to a report by US law enforcement agencies.

It noted:

The use of aircraft is a more expeditious method to move currency into, through, and out of the United States over longer distances than by loading money into a vehicle or strapping it to a pedestrian.

Moreover, the report indicated less likelihood of law enforcement agencies inspecting US-registered aircraft. Notably, small airports along the Mexican border have no security presence, allowing easy cash smuggling by air.

On the other hand, the Treasury Department noted that using cryptocurrencies in other illicit activities is far lower than using cash in money laundering. Some of the activities include scams, ransomware, human trafficking, drug trafficking, and others.

Regarding the digital asset section, the department focused on non-compliance with Anti-Money Laundering by crypto exchanges and trading platforms. It highlighted that crypto-related companies’ failure to comply with AML and Counter-Terrorist Financing (CTF) attracts criminals to their platforms.

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