Winning the Anti- Money Laundering war in the Digital Currency age.Money laundering is the act of making an illegitimate money looks legitimate through the collective process of placement, layering and integration.
According to IMF reports, between 2% and 5% of world GDP is laundered annually. That is about $1- 2Trillion annually.
Understanding these statistics:
1. The total money laundered annually is $400 Billion more than the combine GDP of the 54 African countries by Purchasing Power Parity (PPP).
2. This is the combine market value of Apple, Google, Microsoft, Amazon, Facebook as at 2015.
In financial terms, there are some criminal groups that are more wealthy and powerful than some countries. For example, Solntsevskaya Bratva group was valued at $8.5Billion that is equivalent to the combine GDP of 24 African countries ( Guinea, Niger, Eritrea, Congo etc).
The Nexus of Money laundering and Digital Currency
With the current Advent of Digital Currency, it is much easier to carry out transactions---local and international at the comfort of ones home. Also, it's innovative method of preventing the counterfeiting of these currencies through unique digital signature is commendable.
But despite these numerous advantages, we cannot shy away from the security threat it's poses in the campaign against money laundering.
Digital currency is an emerging money laundering issue which requires urgent attention. Currently, we have 1,386 digital currencies in circulation with Total Market Capitalization of $713.57 Billion worldwide which is not tied or backed by any country or government.
Since it is difficult to monitor digital currency transactions due to its complex mathematical set up, then it means the Anti-Money Laundering campaign would suffer a great setback in this digital currency age.Therefore, funding of Terrorism, Tax Evasion, Drug Trafficking , Money laundering etc would be complex to tackle
For example, the Anti- Money laundering legislation requires banks and other institutions to file a Currency Transaction Report for any transaction of $10,000 and above.
But with digital currency such legislation is easily maneuvered and as such illegitimate funds can be easily integrated into the Economy. How???
Mr. Fraud who earned $15,000 from drug trafficking could easily integrate such money into the system by simply buying 1 Bitcoin and keep it in his wallet.
How can the war against Money Laundering be won in the Digital Currency age while still maintaining the innovative idea behind the development of this currency?
Experts Contributions needed.
Photo credit: www.pwc.com
