From Placement to Integration: A Parametric Study of Cryptocurrency-Based Money Laundering Techniques

Hugo Almeida (), Pedro Pinto and Ana Fernández Vilas
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Hugo Almeida: AtlanTTic Research Center, University of Vigo, 36310 Vigo, Spain
Pedro Pinto: GECAD, Instituto Superior de Engenharia do Porto, Polytechnic of Porto, 4249-015 Porto, Portugal
Ana Fernández Vilas: AtlanTTic Research Center, University of Vigo, 36310 Vigo, Spain

Risks, 2025, vol. 13, issue 12, 1-30

Abstract: The widespread adoption of cryptocurrencies has transformed the financial landscape by enabling swift, decentralised transactions. However, the pseudonymous nature of digital currencies has also fuelled illicit activities, such as money laundering. Criminals perform money laundering to access illicitly acquired funds without detection and convert illegally obtained assets into untraceable commodities, seamlessly integrated into the financial system. Although new regulatory measures have been introduced, illicit actors continue to exploit various methods, from peer-to-peer exchanges to cryptocurrency mixing services, to obscure the origins of illegal funds. This study presents a parametric analysis of these methods, examining dimensions such as duration, number of actors, contextual requirements, operational difficulty, traceability, and costs across each stage of the money laundering process: placement, layering, and integration. The analysis indicates that, while more sophisticated techniques may provide a higher degree of anonymity, they simultaneously require specialised technical expertise and meticulous planning. Consequently, there is a trade-off between the level of privacy attainable and the operational complexity inherent to each method. By systematically comparing these strategies, this analysis aims to contribute to a deeper understanding of cryptocurrency-based money laundering techniques, providing insight for more effective prevention and mitigation measures for both regulatory authorities and the financial sector.

Keywords: cryptocurrency; money-laundering; methods; anti-money laundering (search for similar items in EconPapers)
JEL-codes: C G0 G1 G2 G3 K2 M2 M4 (search for similar items in EconPapers)
Date: 2025
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