FAKULTAS EKONOMIKA DAN BISNIS

UNIVERSITAS GADJAH MADA

DEPARTEMEN ILMU EKONOMI

Mata Kuliah : Ekonomika Internasional II

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“Cryptocurrency and Money Laundering”

Key Background

Cryptocurrencies are traded digitally, relatively anonymous, have low barriers to entry, can be
convenient to use and are international by nature, making them an attractive prospect to some
criminals. While most crypto transactions are legitimate, the specter of financial crime
has become a strong motivator for regulators around the world to bolster scrutiny of
digital assets. With growing demand for cryptocurrency services, in part spurred on by a
growth in value for many major assets and meme tokens during parts of the Covid-19
pandemic, many major financial institutions have moved into crypto markets, including
JPMorgan, BNY Mellon, Morgan Stanley and BlackRock. Despite this, regulatory
uncertainty hinders mainstream acceptance and leaves consumers relatively unprotected.
Money laundering is a commonly touted concern among regulators, as is tax fraud,
terrorism, and drug trafficking. The digital assets are also the payment method of choice for
ransomware hackers, which adds to calls for enhanced regulatory scrutiny.

As technology develops quickly, financial criminals keep up the pace to find new ways
to exploit it via money laundering. Cryptocurrencies are still on a long way to match
traditional financial channels in terms of the volume of value laundered. However, they are
increasingly becoming one of the most favored means for criminals to collect, store and
clean criminal proceeds. Offenders are making use of the lack of control and regulation
over these digital currencies in many regions. Over the past month, we have seen a number of
instances where criminals used different techniques of using cryptocurrencies to launder
money. The perpetrators have been caught, however, what has come to light could be the tip
of the iceberg.
There are many countries where cryptocurrencies are either unregulated or under-regulated,
effectively helping financial criminals conduct their activities unrestrained. Giving a
rough estimate of the criminal money involved, major crypto thefts, hacks, and frauds during
the first four months of 2021 totaled $432 million, according to blockchain analytics firm
Ciphertrace.

While criminals are quick to adapt technological advancement with financial transactions such
as cryptocurrencies, financial institutions and regulators need to be more proactive to counter
the misuse. Regulators across the world should invest time in creating effective rules
pertaining to the crypto space and promote the use of technology to detect crime. Meanwhile,
financial institutions should look at technological opportunities to prevent money laundering
with these new-age transaction methods.

A Global Problem
Cryptocurrencies, including Bitcoin, can make it easier for criminals to obscure the source of
criminal proceeds and move the illegal l funds across borders without detection. Recent
reports suggest that the use of cryptocurrencies for money laundering is rapidly gaining
acceptance worldwide. Let’s look at some of the cases reported recently.

The UK makes its largest ever seizure of crypto assets in money laundering
investigation
In June, specialist detectives from the London Metropolitan Police Economic Crime Command,
investigating money laundering offences, seized crypto assets worth £114 million – the largest
cryptocurrency seizure in the country. “Cash remains king, but as technology and online
platforms develop, some are moving to more sophisticated methods of laundering their
profits, said Deputy Assistant Commissioner Graham McNulty.

The US sentences cryptocurrency fraudster for money laundering and securities fraud
On July 4, the US Department of Justice announced that a Swedish man, Roger
Nils-Jonas Karlsson, was sentenced to 15 years in prison for securities fraud, wire fraud
and money laundering charges that defrauded thousands of victims of more than US$16
million through an investment scam. Karlsson promised astronomical returns and lured
victims to purchase shares in an investment scheme using cryptocurrency such as
Bitcoin and other online payment platforms. Karlsson transferred the funds received to
his personal bank accounts, and then used proceeds to purchase expensive homes, a
racehorse and a resort in Thailand.

China arrests over 1,100 suspects in crackdown on cryptocurrency money laundering

China’s Ministry of Public Security said in June that its law enforcement arrested more than
1,100 people suspected of using cryptocurrencies to launder illegal proceeds from telephone
and Internet scams. The police busted more than 170 money laundering groups who charged
their criminal clients a commission of 1.5% to 5% to convert illegal proceeds into
virtual currencies via crypto exchanges.

How They Break the Trail

Admittedly, there are tools that money launderers use to disguise the trail of money. In most
cases, criminals buy virtual currencies with dirty money and sell them to get “clean” money.
With each transaction a block gets added and increases the information that needs to
be combed through to find suspicious transactions. It’s not untraceable but unless the
authorities have the necessary knowledge and computer power, it at least makes it a very time
consuming affaire to be discovered. Transferring the money through different wallets,
makes it even harder to spot illicit funds, especially where wallet providers were not overly
interested in the true identity of their customers. As a next step, sending cryptocurrencies to
an exchange and change it into other cryptocurrencies, adds another layer. If the funds are
then transferred to a different wallet, preferably one were the provider again did not care
much about checks, the trail is broken.
Pertanyaan untuk Analisis
Perlu diingat, pertanyaan-apertanyaan berikut hanyalah panduan. Silahkan untuk
mengembangkan esai sesuai data yang berhasil Anda kumpulkan dan kesimpulan
dari diskusi kelompok.
1. Menurut Anda mengapa cryptocurrency digunakan sebagai sarana pencucian uang?
2. Jika peran cryptocurrency semakin penting dalam keuangan internasional, mengapa
belum banyak negara yang menerapkan peraturan keuangan untuk mencegah
kejahatan finansial?
3. Bagaimanakh tren penggunaan cryptocurrency dalam transaksi keuangan internasional
di masa mendatang? Silahkan menyertakan grafik atau data lainnya untuk mendukung
argumen Anda.
4. Menurut Anda bagaimanakah teknologi dapat digunakan untuk membantu memerangi
pencucian uang melalui media kripto? Jelaskan secara spesifik. Jangan ragu untuk
memilih suatu negara tertentu sebagai contoh.
5. Apakah Anda melihat keuntungan yang jelas bagi negara berkembang untuk
menggunakan cryptocurrency dalam transaksi keuangan internasional mereka? Jika
demikian, bagaimana Anda akan menindaklanjutinya?
6. Apa yang akan Anda lakukan jika Anda adalah seorang regulator keuangan yang
membawahi seluruh transaksi finansial dalam suatu negara? Strategi apakah yang
Anda lakukan untuk menghindari masalah yang dijelaskan di atas?

Catatan
Studi kasus ini diadaptasi dari sebuah artikel dari Forbes, oleh Robert Hart, dan
sebuah artikel dari website TookiTaki.

Daftar Pustaka
Hart, R. (2021, July 13). British police seize $250 million of cryptocurrency in International
Money Laundering Crackdown. Forbes. Retrieved October 12, 2021, from https://
www.forbes.com/sites/roberthart/2021/07/13/british-police-seize-250-million-of
cryptocurrency-in-international-money-laundering-crackdown/?sh=5449ee463c18.

Abhishek.tookitaki. (2021, July 30). The rise in cryptocurrency money laundering cases in
2021. Tookitaki. Retrieved October 12, 2021, from https://www.tookitaki.ai/news
views/the-rise-in-cryptocurrency-money-laundering-cases-in-2021/.