Money launderers use fiat, not crypto: report

The role played by cryptocurrencies in money laundering has been greatly exaggerated by opponents of the emerging asset class, according to a new report from the Society for Worldwide Interbank Financial Telecommunication (SWIFT).

The network, which banks and other financial institutions use for transferring information securely across borders, says fiat currency is still the most widely used medium for such illicit purposes.

Money laundering remains a serious international problem. United Nations research indicates that anything from $800 billion to $2 trillion is laundered via fiat channels each year. But cryptocurrencies are used in just a small fraction of such activity.

“Identified cases of laundering through cryptocurrencies remain relatively small compared to the volumes of cash laundered through traditional methods,” said SWIFT.

SWIFT said traditional methods such as using cash mules, hawala (an informal system that employs intermediaries), front companies, cash businesses, and the illegal drug trade remain dominant in money laundering. However, the use of cryptocurrencies is minimal, says the report, with even the cybercriminal usage of digital assets like bitcoin being “few and far between.”