Is crypto currency a vehicle for money laundering in the banking industry?

Abstract

Research and recent statistics have shown that money laundering is the most reported type of financial crime around the world. Inventions of new technologies bring certain changes with them, one of which is the change from fiat to crypto currencies. The purpose of this research study is to find out whether money laundering and other financial crimes are passed through crypto currencies in the banking industry or not. The aim is to discover whether crypto currencies are used in an illegal way and if yes, how is this possible and why. This study investigates the relationship between financial crime and the use of virtual currencies on the block chain system. The research methods used were a mixture of both qualitative and quantitative secondary data. A total of three semi-structured interviews were conducted with professionals working in financial institutions and a regulatory governmental entity. On the other hand, fifty questionnaires consisting of both open-ended and close-ended questions were conducted with financial institutions employees. Results from both interviews and questionnaires conducted show a relation between financial crime and crypto currencies. For the participants, criminals are constantly updated with new inventions and technologies and therefore will always find means to by-pass illicit funds through the financial system by the use of crypto currencies. We can conclude that the research question was answered as the majority of the results were in sync and a general agreement that crypto currencies are a vehicle for money laundering in the financial system.