Since the coming of crypto currency, it has brought so many innovation in the financial sector, crypto currency has brought in decentralization and has made users in charge of our financial transaction.

But with the whole benefits the crypto space has brought, it has also open up a space for more money laundering. We are going to look at money laundering and how it's been tackled in the crypto space.

Money laundering is turning money made illegally to look legal.

Crypto currency has revolutionize the financial sector with opportunities for more investors, but this has come with some negative effect ( money laundering).

Due to the fact that the crypto industry has an anonymous nature, criminals are increasingly devising methods to exploit the anonymity and decentralized nature of the crypto space, transaction to cover their identities and origin of their funds.

According to Elliptic, as of 2019 only, $829 million in bitcoin has been spent on the dark web. RenBridge has been used to launder at least $540 million in crime-related crypto cash since 2020, according to new research from blockchain analytics firm Elliptic.RenBridge is an open protocol, so it doesn't operate with a CEO or any central figurehead, the describe the system that is not regulated and a cross border space.

Most crypto currency money laundering cases involves:

Tumblers: tumbler is like a tool that helps make your cryptocurrency transactions more private by mixing them with other people's transactions, making it harder to trace where the money is coming from or going to.

Unregulated exchanges: Unregulated exchanges in crypto are places where you can trade digital assets without following strict government rules. They're less supervised, which can mean more flexibility but also more risks like fraud.

Gambling and gaming sites:gambling sites are places where you can use digital money to bet or play games of chance. Gaming sites are similar but include a variety of activities, like video games, where you use cryptocurrencies for in-game stuff. Just be careful, as some of these sites may not be trustworthy.

Prepaid cards:prepaid are cards that are pre-loaded with a certain amount of cryptocurrency, allowing you to spend or use it as needed.

It's not like Crypto currency is the only tool to perform illicit actions but it has so many areas if exploited can be used for illicit actions, but we can focus on aspects we can use crypto currency to make a better financial system. Pen is a writing material and can be used as a murder weapon, that does not lead us to not using it.

What helps criminals and scares investors from crypto space

Anonymity: Anonymity refers to the ability of users to conduct transactions without revealing their real-world identities. This has made so many crimals to run into the crypto space.

Difficulty to track their movement: Cryptocurrencies can be tricky to track because they use addresses instead of personal info, operate on decentralized networks, and some have extra privacy features.

Lack of control: lack of control means there's no one big boss overseeing everything. It's decentralized, so no single person or group has total power. This gives users more freedom but also means they need to be careful and responsible for their own transactions.

Blockchain technology with cryptography and distributed consensus network has made privacy and security legit. Measures have emerged, regulations of virtual currency which aims at fighting anonymity in the crypto space for money laundering and the financing of terrorism. Legitimate exchanges follow regulatory requirements for identity verification and sourcing of funds which are AML compliant. When exchanges are regulated, they are required to apply KYC policies and protocols to their customers. The crypto system offers lots of advantages and criminals won’t stop exploiting the blockchain. Money laundering can be at a pass with tools that match customers data with transaction histories which will be more easier for MSBs to identify high risk customers and avoid associating crypto money with money laundering. Various solutions that can be implemented tocontrast money laundering involving crypto currencies include:

Strengthening AML procedures at financial institutions.

Enhancement of transaction monitoring.

Improving regulations.

Though there is still more work and effort to be put in place but system professionals working hard to see crypto transparency a success, to prevent fraudulent acts and ability to track them when they occur. The advancement of the crypto space will guarantee safety and trust which will bring more investors.

In conclusion everything that has an advantage has a disadvantage also, like I said earlier the fact that we use pen to write doesn't mean it can't be used for a murder, that's how it is in the crypto space. There is a stop to money laundering in the crypto space. Making crypto currency a safe financial system should be an opportunity.