“Cyber-laundering”: the change of money laundering in the digital age
| DOI | https://doi.org/10.1108/JMLC-04-2021-0035 |
| Published date | 25 June 2021 |
| Date | 25 June 2021 |
| Pages | 330-344 |
| Subject Matter | Accounting & finance,Financial risk/company failure,Financial compliance/regulation,Financial crime |
| Author | Christoph Wronka |
“Cyber-laundering”: the change of
money laundering in the
digital age
Christoph Wronka
Deloitte GmbH Wirtschaftsprüfungsgesellschaft, Hamburg, Germany
Abstract
Purpose –This study aims to illustrateand determine how illegally obtained funds arelaundered through
online platformsand companies in different economicsectors in the digital age.
Design/methodology/approach –A qualitative analysis approach using purposesampling methods,
including 21 semi-structured interviews with prevention experts, compliance officers and convicted
cybercriminals, resulted in the determination of concrete money-laundering methods involving the
employmentof online platforms provided by companiesand institutions in differenteconomic sectors.
Findings –The current study focuses on variouscompanies in different economic segments that mitigate
cyber laundering and the anti-money laundering measures that can be adopted. Therefore, this paper
provides a detailed discussionand analysis on how money launderers avoid being detected. Both preventive
and criminalperspectives are taken into consideration.
Originality/value –By identifying the gaps in the current anti-money-laundering mechanisms, it will
provide complianceofficers, legislators and law enforcement agencieswith an in-depth insight into how cyber
launderingoperates in various economic sectors.
Keywords Digital age, Cybercrime, Money-laundering, Financial crime prevention measures
Paper type Research paper
1. Introduction
Money laundering refers to the illegalprocess of making large amounts of money that have
been gained from actively participatingin criminal activities, such as drug trafficking, and
which seem to be generated from a legitimate source (Li et al.,2020). The criminal justice
system views the money from the criminal system as dirty, and the entire illegal business
“launders”it to make it look clean. Legalizing incomes is of great importance as it allows
criminals to use the proceedsobtained through unlawful means without revealingits source.
The term “money laundering”was first used at the beginning of the twentieth century to
label the operations that in some way intended to legalize the income generated from illicit
activity, thereby facilitating their entry into the economy’s monetary flow (Naheem, 2016).
Organized criminal gangs were making a lot of money from extortion, prostitution,
gambling and bootlegging.Therefore, laundering became the perfect means of showingthat
their sources of cash were legitimate. With the new age of technological advancements, it
was only a matter of time beforecriminals started using the internet for laundering purposes
(Leslie, 2014). The criminal practice of money laundering in cyberspace through online
transactions has been termed cyber-laundering. Individuals practicing money laundering
are continuously looking for new ways to avoidbeing detected by law enforcement, and the
internet has opened a plethora of opportunitiesfor them. As of January 2021, there were 4.66
billion active internet users globally, making up 59.5% of the global population. Of this
number, approximately 92.6% (4.32 billion)are currently using mobile devices to access the
JMLC
25,2
330
Journalof Money Laundering
Control
Vol.25 No. 2, 2022
pp. 330-344
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-04-2021-0035
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