Money Laundering in Cyberspace

Money laundering can take place in practically any location, on the web includingly. International experts believe that the Internet is especially vulnerable to be used by criminals for laundering money.

In cyberspace, money can be laundered through Internet casinos, online banking and web-based financial services. By means of Internet communication, money launderers can stay anonymous.

Internet banking makes it more difficult to locate money launderers, Internet bank accounts can be accessed from anywhere, so online banking is one of the beloved ways of money laundering for many criminals.

Regarding this, the Financial Action Task Force (FATF) described in the post on June 17, deals with working out new ways of anti-money laundering and of diminishing the risk that exists at any stage of the contact via Internet between a new customer and a financial institution. In case of Internet banking, there is a risk of working with money launderers especially if the bank account is opened by e-mail and fax, without customer’s personal visit to the bank. So, this complicates the possibility to detect crime.

Internet-based gambling operations also serve as a financial haven for ”dirty” money laundering operations. The FATF reported that there is evidence of using online casinos to commit crimes and launder the proceeds.

It is also problematic to track laundered money because gambling records are software based and, as to the gambling place, they are often located in offshore jurisdictions, that’s why it is extremely difficult to find out the physical presence of the records. It has already been discussed in post on May, 9 that offshore tax havens have not only legitimate uses, however, it goes without saying that money laundering can occur anywhere in the world – either offshore or “onshore”. Another problem of tracking gambling records is that these records do not necessarily exist at all.

To conclude, money laundering in cyberspace has many types and takes many directions, and does require more attention and discussion in next posts.

Leave a Reply

You must be logged in to post a comment.