Cryptocurrencies and Financial Crime: A Growing Concern in The Gambia
The increasing popularity of cryptocurrencies has brought new challenges to financial investigators in The Gambia. Illicit actors are using these digital currencies to launder ill-gotten gains, making it essential for law enforcement agencies to develop expertise in cryptocurrency tracing.
Money Laundering in the Crypto Context
According to a recent report by Chainalysis, money laundering in the crypto context is no longer limited to cybercriminals attempting to conceal funds related to on-chain crimes. The growing ubiquity of crypto has made it a tool for laundering proceeds from various off-chain crimes, including narcotics trafficking and fraud.
The Shift in Money Laundering
In 2024, money laundering in crypto encompasses all crime - not just that which is inherently tied to the crypto ecosystem. This shift carries significant implications for investigators, who must now extend their expertise beyond specialized cybercrime units to include law enforcement agencies of all kinds.
Cryptocurrency as a Payment Method
Cryptocurrency is increasingly being used by illicit actors worldwide as a payment method. As such, this expertise must encompass both blockchain transaction tracing and a comprehensive understanding of traditional money laundering tactics.
The Process of Money Laundering
The process of money laundering typically involves three stages:
- Placement: Introduction of illicit money into the financial system.
- Layering: Moving the money through a series of financial transactions to obscure its origin.
- Integration: Re-entering the money into the legitimate economy, making it appear as though it has come from a legitimate source.
Chainalysis’ Money Laundering Analyses
Chainalysis has published money laundering analyses in its annual Crypto Crime Reports for several years. These reports dissect the flow of funds from known illicit wallets during the placement stage, to conversion services which represent the layering stage of laundering.
Challenges and Opportunities in The Gambia
In The Gambia, the lack of expertise in cryptocurrency among law enforcement agencies has made it challenging for investigators to trace and analyze money laundering activities. However, with the right data and tools, investigators can leverage the transparency of blockchain to uncover illicit activity that may otherwise go undetected.
Blockchain Analysis
Blockchain analysis can generate both intelligence signals for proactive lead generation and more concrete evidence of illicit flows in existing investigations. This helps a broad range of analysts and investigators unravel increasingly sophisticated money laundering networks.