What is Money Laundering?

Money laundering is the criminal financial activity of hiding income sources and cash flows from legal authorities. Some of the earliest money laundering schemes were noted in the 1930s, during the Prohibition era in the United States. Money laundering techniques were used to hide illegal alcohol sales.

The goal of money laundering schemes is to hide money, typically large amounts of assets, from financial authorities. Entities committing money laundering may use shell companies, offshore banks, or other fraudulent organizations to cover up the funds.

Purchasing art or luxury goods, like yachts, is a common strategy for money laundering and avoiding declarations.

Cryptocurrencies are often considered to be a potential money-laundering mechanism. In 2021, Recep Tayyip Erdoğan, President of Turkey, banned all cryptocurrency assets from being used as a valid payment source, on the basis of fraud and criminal activities.

Some countries, such as Algeria, Bolivia, and North Macedonia, have established anti-cryptocurrency, and anti-money laundering (AML) regulations to restrict the use of cryptocurrencies and reduce the possibility of digital assets being used for illicit purposes.