Money Laundering

Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.

Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space.

Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laundered through financial institutions each year.

This is not entirely surprising given the structure of the financial services industry and the nature of products and services offered by its participants.

An ecosystem that involves the management, control, and processing of finances is inherently vulnerable to abuse by money launderers.

Money Laundering Explained

The act of laundering is committed in circumstances in which an individual or entity is engaged in an arrangement that involves the proceeds of crime.

These arrangements include a wide range of business relationships, i.e. banking, fiduciary and investment management.

However, the degree of knowledge or suspicion will depend upon the specific offense but will usually be present where the person providing the arrangement, service or product knows, suspects or has reasonable grounds to suspect that the property involved in the arrangement represents the proceeds of crime.

In some cases, the offence may also be committed where a person knows or suspects that the person with whom he or she is dealing is engaged in or has benefited from criminal conduct.

One of the primary criticisms against cryptocurrencies has been their propensity for money laundering.

Their anonymous nature and unregulated network structure make them ideally suited for money launders.