In 2013, just 35.4% of the global population was using the internet. This figure grew to 67.4% by 2013, marking an increase of over 90% in global internet usage over the last 10+ years.[1]
It’s not just ordinary people and businesses who’ve been part of this change. Criminals are harnessing the internet and other recent technological developments to expand their operations. In fact, they’re often able to do so more rapidly than law enforcement organisations, as they don’t have the same ethical and legal concerns.
From GenAI to messaging platforms with global coverage, new technologies have caused a distinct shift in the face of crime. In this report, we explore how criminals are currently using modern technologies and the digital world to streamline money laundering.
The internet and the technologies that have accompanied its rise have made it easier to communicate than ever before.
Ever adaptive, criminals are using these technologies to expand the reach and complexity of their operations. There are four main forms of communication to be aware of:
One example of this is Ghost, which was taken down by Europol in 2024. However, criminals remain nimble, building and finding new platforms as their current one becomes compromised.
Perhaps the most famous dark web marketplace was Silk Road, active from 2011-2013. It was shut down by the FBI, who discovered the true identity of the founder by investigating old forum posts until they found a post where he shared his email, which included his full name.
Sometimes these platforms require specialised hardware to access, such as Sky ECC phones. However, plenty are easy to access through most modern smartphones, for example Telegram.
By using these platforms, criminals can communicate with a large number of legitimate users. This means they’re often used for recruitment.
Crucially, the internet has made it easier for criminals to communicate, meaning that they have a wider reach for and easier access to recruitment, trade and even making financial transactions. The sort of communications that required a high level of technical expertise are now far more accessible to less tech-savvy criminals.
This ease of communication has enabled money launderers to have a more global reach and accelerated pre-existing forms of money laundering.
For example, money launderers have previously exploited informal value transfer systems (IVTS), such as hawalas. However, digitalisation offers criminals the opportunity to do so on a much larger scale. It’s now easier for them to contact other IVTS providers across the globe, speeding up these transactions.
Crucially, IVTS allow the transfer of funds across borders without the money itself actually having to cross the border. Transactions made this way can be difficult to track. These systems hold obvious appeal for money launderers, especially in a digital age where transactions made through traditional finance systems are almost always traceable.
Suggested reading: Money launderers aren't the only ones using the digital world to expand operations. Other criminals are, too - read these reports to learn how.
Traditionally, criminals relied on cash-based methods for ‘cleaning’ money. As new technology has developed, though, so too have new modes of money laundering. Key developments include:
Cryptocurrencies are digital currencies that use cryptography. They have grown more popular in recent years, both with legitimate and illicit users. As they operate using Decentralized Finance (DeFi), there is little oversight, which means that criminals can transfer funds within the blockchain without any intermediaries like banks.
However, with the right training and expertise, it’s theoretically possible to trace every step of a cryptocurrency transaction. That’s because much of it is built on blockchain technology, in which each transaction is recorded on an immutable ledger.
NFTs are unique tokens which denote ownership of a specific item, whether this exists in the real or digital world. Criminals launder them in a variety of ways, including overpaying for an NFT to transfer money or creating NFTs to trade to accomplices. Essentially, criminals can exploit NFTs to mimic legitimate transactions and move huge amounts of money.
If these methods are technically more traceable than cash-based techniques, why are criminals favouring them?
The first reason is that these technologies have developed rapidly and were originally considered niche. Due to this, there is a relative lack of oversight of them – and criminals are exploiting this. In many cases, regulatory and enforcement organisations simply haven’t had the time to ‘catch up’ in understanding how these technologies work. They just don’t have the resources to trace or disrupt the large volumes of illicit transactions occurring in these systems.
Secondly, these newer money laundering techniques have the advantage of being digital and borderless, allowing criminals to seamlessly transfer funds across the globe. For large organised crime groups, the appeal of this is obvious.
The proliferation of the digital world – both in its capacity to facilitate communication and provide new ways of laundering money – has also lead to the growth of money laundering as a service.
In this model, criminals outsource the cleaning of funds to individuals with specialised knowledge in money laundering. This means that criminals can exploit the new opportunities that digitalisation offers, without having to understand how it works.
Money laundering as a service might be heavily facilitated by digital communications platforms, but it appeals beyond strictly digital money laundering techniques too. Many more traditional forms of money laundering rely on building complex corporate structures and using proxies to evade detection. Doing this effectively requires specialist knowledge but, due to money laundering as a service, criminals no longer have to possess this knowledge themselves.
Corruption is far from new. It’s long been the accomplice of those looking to launder money and evade the consequences.
However, the evolving digital landscape has certainly provided new ways to facilitate it.
The internet makes it easier to communicate anonymously over a distance than ever before. Criminals are exploiting this by increasingly recruiting corruptees – whether that’s individuals belonging to regulatory bodies, financial institutions or beyond – online. Digital platforms not only make it easier for criminals to find a way of contacting these individuals, but also potentially lower the risk of detection for both parties, if privacy-focused platforms are used.
Once criminals have recruited a corruptee, new technologies also make it easier for them to transfer the bribe. For example, criminals can exploit the lack of oversight of digital currencies to transfer the funds undetected. Because they’re not using the bank as an intermediary, the usual red flags and alerts won’t be raised. Cash might also provide this benefit, however it must be transferred physically, which carries a risk of detection. Cryptocurrency has no such need and therefore no such risk.
Although the techniques might be new, corruption serves the same purpose to criminals laundering money as it did before the digital age. It creates an environment conducive to illicit activities, giving criminals a way to receive tip-offs and evade detection.
“They virtually all depend on money laundering to conceal the sources of illegally obtained funds, so that they can re-invest them and further expand their illicit undertakings”[2]
It’s important to consider the importance of disrupting money laundering. Although some criminals are ideologically or politically motivated, most criminals conduct illicit activities with the aim of making money. In order to access the desired funds, criminals must first launder them so that they appear legitimate – meaning that disrupting money laundering is a vital component in fighting crime more widely, including:
Disrupting the flow of funds as they enter the legitimate market not only diminishes criminal profits, but it also provides a crucial entry point into unmasking and understanding the networks behind crime. This will only become more relevant as criminals continue to exploit digital developments to render their activities more obscure and complex.
It’s likely that the combination of ongoing global hardship and straightforward access to technologies that facilitate crime have driven more people to use illicit activities as a source of profit. In this way, we might say that crime is even more profit-motivated than before – and modern digital developments are partly to blame.
So far, we’ve discussed how criminals are using the modern digital landscape to expand operations, laundering more money whilst remaining undetected.
What insights does this give us into how to disrupt these emerging illicit activities effectively?
Although it might be up to the public sector to enforce money laundering law and prosecute those caught in the act, private sector organisations play a significant role in facilitating money laundering. This means they also need to be involved in any effective solution.
Even with new digital money laundering techniques in play, a common final step is for criminals to move funds into a traditional bank account so that it can be easily accessed. In other cases, they may use it to buy assets such as real estate or luxury goods to ‘clean’ it. Although it’s far from commonplace, buying such assets can increasingly be done using cryptocurrency, so criminals don’t necessarily have to pass funds through a traditional bank account.
It’s crucial that the organisations facilitating these accounts and transactions have stringent measures in place to identify and prevent money laundering, and that public sector bodies can collaborate with them to identify, investigate and prosecute individuals laundering money. Traditional financial institutions and the more modern companies accepting cryptocurrency as payment must both be involved – and ideally, even the digital currency providers themselves.
The ultimate aim of anti-money laundering operations, alongside wider counter-economic crime measures, is seizing illicit funds and disrupting the flow of cash to criminals.
However, in the EU, estimates suggest that only 2% of proceeds are currently being confiscated from criminals. Asset recovery is an effective deterrent, but only when it catches enough criminals to seem a real threat. Public sector organisations need to employ new techniques if they want asset recovery to be more effective.
Since criminals are adapting to digitalisation, it follows that law enforcement must too. For example, many cryptocurrency transactions are traceable – investigators must simply have the right knowledge and skills to do so. In other words, investment in the right training can go a long way towards combatting this new type of money laundering.
Better training can have a huge impact when it comes to leveraging other aspects of the digital world, too.
Criminals are increasingly using the internet to recruit, communicate, trade and transact. Investigators must be prepared to leverage publicly available internet data to track this criminal activity and map out connections.
Open Source Intelligence (OSINT) refers to the targeted collection and analysis of publicly available data, often internet data. It can be drawn from sources including:
It’s easy to see why OSINT is becoming an essential resource as more criminals turn to the internet. Historically a niche discipline, OSINT has nevertheless been used for years by many public sector investigators. As OSINT becomes increasingly digital and offers the potential for more direct insights into criminal activity, it needs to be widely understood and implemented by more investigators working to counter money laundering.
Alongside adopting new techniques to counter digital crime, it’s also important to consider adopting new technologies.
Naturally, those countering economic crime have more barriers to implementing new technology than criminals do. Criminals don’t have to worry about ethical implications or reliability: they can simply try something out and, if it doesn’t work, move on.
This difference gives us important insights into how counter-economic crime teams should approach using new technology. Having more ethical and legal boundaries in place can be seen as an advantage, as it encourages considered, strategic use of technology. These teams shouldn’t use new tools just for the sake of doing so. Instead, they should invest in meaningful innovation and deploy new tools where they will have maximum impact.
AI has risen in popularity rapidly in recent years. Criminals are certainly no strangers to it, whether that’s fraudsters using GenAI to create convincing scripts or cyber threat actors leveraging deepfakes to infiltrate organisations.
But is it possible to use AI to counter criminals without sacrificing safety, integrity or ethics? Can AI achieve anything that investment in the right training can’t?
In order to understand where AI could fit within money laundering investigations, we must first understand AI’s strengths and limitations. On the one hand, AI can ingest far more data than a human can, and at a much more rapid pace. It can also be designed to follow set logical steps. What it can’t do is think and make decisions like a human: AI chatbots might output human language, but that doesn’t mean a human mind is behind it. Understanding this allows us to then focus AI usage on the tasks it will be best at, for example:
Ultimately, the best use of AI will vary depending on what data an investigator is working with, the time they have available to them and the aim of the investigation. But there are some ways to identify a more reliable tool, regardless of use case. These are:
By avoiding these pitfalls, AI can increase efficiency and reduce human error.
Earlier, we discussed how important OSINT is for fighting money laundering in an increasingly digitalised world.
The problem, though, is that OSINT is traditionally a highly manual technique. This becomes challenging when teams – which are already stretched thin – must counter increasingly complex money laundering operations. Relying on manual techniques, there’s often not enough time to gain a real understanding of criminal activity before more damage gets done.
Luckily, modern OSINT platforms cut out much of the tedious manual workload, allowing investigators to derive deeper insights, faster. Such platforms assist investigators in cutting through the growing amount of digital noise, even as criminal activity grows more complex.
Here are some of the key features to look for in a good OSINT tool:
We’re Blackdot Solutions, leading providers of investigations technology in the counter-economic crime space. Book a call with one of our experts today to understand how you can adapt to the changing digital landscape and continue to disrupt the flow of funds to criminals.
[1] https://ourworldindata.org/grapher/share-of-individuals-using-the-internet
[2] https://www.europol.europa.eu/publication-events/main-reports/changing-dna-of-serious-and-organised-crime#downloads