Cryptocurrencies: Money Laundering & Terrorism Financing

Abstract

This paper is a research to study the use of cryptocurrencies in money laundering and terrorism financing, these currencies are decentralized currencies, and they are also virtual and convertible and were created on the basis of cryptography. They have been gaining reputation as a means of payment offered to enterprises and customers, and as substitutes and competitors for the traditional centrally controlled fiat currencies issued by governments. Our first point was the fact that its increasing popularity has been attracting scholars and governments because of anti-money laundering concerns. We argue on the fact that there are high potential benefits for criminals, because of its known uses in money laundering and the neglected fact that these currencies are used as money laundering instruments. To study these issues, the paper will study these currencies as a whole and then will study the structure of money laundering and anti-money laundering processes, this will help us to get an idea on money laundering and its use in terrorism financing and information regarding the influence cryptocurrencies have on money laundering process and the incentives they offer to criminals for them to utilize crypto in money laundering. This aims to answer a very big question, whether cryptocurrencies are being used in money laundering and terrorism financing.