A report from ivezz.com indicates that annually, an estimated 2-5% of global GDP is laundered, potentially reaching $5.05 trillion by 2024.

Despite increasing scrutiny on cryptocurrency for illicit financial activities, its role in global money laundering is minimal. According to the United Nations Office on Drugs and Crime, the estimated annual laundering ranges from $2.22 trillion to $5.54 trillion for 2024. However, Chainalysis reported only $23.8 billion in crypto laundering for 2022, representing just 0.47% of the lower estimate of global money laundering.

Additionally, Chainalysis’ 2024 report showed a decline in crypto-related illicit activities, dropping from $39.6 billion to $24.2 billion last year, accounting for 0.34% of on-chain activity. Laundering through sanctioned entities fell to $14.9 billion, nearly a 50% reduction.

These figures highlight that traditional financial systems still dominate money laundering. For example, in the US, about $300 billion is laundered annually, significantly higher than the global crypto laundering figure of $23.8 billion. In the UK, over £100 billion is laundered each year, further illustrating the minor role of crypto.

Traditional financial systems, including banking and payment systems, remain primary conduits for illicit funds. In Germany, around €100 billion is laundered annually through sectors like real estate and art dealerships, which have low anti-money laundering awareness. In Russia, dark money hidden abroad is estimated at $1 trillion, and China's annual laundering is about $154 billion, showing the scale of conventional money laundering compared to cryptocurrency.

Global anti-money laundering efforts continue to face challenges. The Basel Institute of Governance reports slow progress in mitigating these risks, emphasizing the need for stronger supervisory frameworks and better prosecution.

The ivezz.com report underscores that while cryptocurrency plays a role in money laundering, it is relatively minor compared to traditional financial crimes. The report concludes:

"No matter where you live, offenders launder up to 5% of the GDP that you produce and hide it away. Money laundering steals from the taxes you pay, making rich people richer and poor people poorer."

Understanding these dynamics is crucial for developing effective anti-money laundering strategies that address both traditional and emerging financial systems and for accurately assessing the role of digital assets in financial crimes.