Nandika Kaushik, Symbiosis Law School, Pune
ABSTRACT
The emergence of cryptocurrencies has aroused a great deal of attention and curiosity since it introduces a brand-new type of digital currency that operates independently of central regulatory bodies. Despite having advantages like low transaction costs and simplicity of usage, cryptocurrencies have also come to be associated with illegal activity, particularly money laundering. Money laundering is the process of transferring illicitly obtained funds through opaque financial networks in order to conceal its source and final destination. Due to its decentralised structure, accessibility on a worldwide scale, and anonymity, cryptocurrencies make for an excellent means of money laundering.
This article examines the symbiotic relationship between cryptocurrency use and money laundering. It emphasises how cross-border financial transactions made possible by cryptocurrency are quicker and more effective than conventional wire transfers. Additionally, the lack of taxation and the uncontrolled nature of cryptocurrency transactions encourage illegal activities like money laundering and the sponsorship of terrorism.
Due to their anonymity and untraceability, dark web markets, which are infamous for aiding illegal operations, have embraced cryptocurrency. Due of this, the use of cryptocurrencies for money laundering, the trafficking of illegal goods, and other criminal activities has significantly increased. The Financial Action Task Force (FATF), among other regulatory bodies, aims to combat money laundering on a global scale. By maintaining black and grey lists of nations with weak anti-money laundering policies, the FATF offers a platform for better oversight and accountability.
This article also looks at the laws governing cryptocurrencies in important nations like the United States, Canada, and India, highlighting the various measures implemented to reduce the risk of money laundering. Nevertheless, despite regulatory efforts, the absence of a thorough legal structure specifically for cryptocurrencies makes it difficult to effectively prevent money laundering.
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