$200bn of cybercrime laundered every year

Written by Mark Evans
16/03/2018

An academic study into the macro economics of cybercrime and laundering estimate that $80-$200 billion are ‘cashed out’ each year, and in total cybercriminal proceeds make up an estimated 8-10 per cent of all illegal profits laundered globally.

The findings, part of a larger nine-month study titled Into the Web of Profit and sponsored by Bromium, report the use of virtual currencies as the primary tool used by cybercriminals for money laundering. However, Bitcoin is now out of favour with the criminal elements that increasingly use less recognised virtual currencies that provide greater anonymity.

Another laundering system exists around in-game purchases and gaming-related laundering; with China and South Korea becoming hotspots for gaming-currency laundering. But the rise of digital payment systems in all kinds have helped the laundering of money - often involving the use of micro-laundering techniques where multiple, small payments are made so laundering limits aren't triggered.

Many cybercriminals are using virtual currency to make property purchases which convert illegal proceeds into legitimate cash and assets. Websites such as Bitcoin Real Estate, unlike cash purchases which are subject to regulation and scrutiny, allow properties to be purchased with cryptocurrency are not as closely scrutinised. The study also found that nearly 25 per cent of total property sales are predicted to be in cryptocurrency in the next few years.

However, the report highlights that law enforcement agencies are now monitoring Bitcoin, causing many cybercriminals to look for alternatives. Information on bitcoin transactions can leak during web transactions - typically via web trackers or cookies. This means that connecting transactions to individuals is possible in up to 60 per cent of Bitcoin payments.

Into the Web of Profit is a nine-month academic study by Dr. Mike McGuire, senior lecturer in Criminology at Surrey University. It draws from first hand interviews with convicted cybercriminals, data from international law enforcement agencies, financial institutions, and covert observations conducted across the Dark Web.