Money laundering is like an art where launderer may change and evolve the way of how the money is going to be laundered.

The generic term used to describe money laundering is the process by which criminals disguise the original ownership and control of the proceeds of criminal conduct by making such proceeds appear to have derived from a legitimate source.

The processes by which criminally derived property may be laundered are extensive. Though criminal money may be successfully laundered without the assistance of the financial sector, the reality is that hundreds of billions of dollars of criminally derived money is laundered through financial institutions, annually. The nature of the services and products offered by the financial services industry (namely managing, controlling and possessing money and property belonging to others) means that it is vulnerable to abuse by money launderers.

Money laundering offences have similar characteristics globally. There are two key elements to a money laundering offence:

• The necessary act of laundering itself i.e. the provision of financial services; and
• A requisite degree of knowledge or suspicion (either subjective or objective) relating to the source of the funds or the conduct of a client.

The act of laundering is committed in circumstances where a person is engaged in an arrangement (i.e. by providing a service or product) and that arrangement involves the proceeds of crime. These arrangements include a wide variety of business relationships e.g. banking, fiduciary and investment management.

The requisite degree of knowledge or suspicion will depend upon the specific offence but will usually be present where the person providing the arrangement, service or product knows suspects or has reasonable grounds to suspect that the property involved in the arrangement represents the proceeds of crime. In some cases the offence may also be committed where a person knows or suspects that the person with whom he or she is dealing is engaged in or has benefited from criminal conduct.

The processes are extensive. Generally speaking, money is laundered whenever a person or business deals in any way with another person’s benefit from crime. That can occur in a countless number of diverse ways.

Traditionally money laundering has been described as a process which takes place in three distinct stages.

• Placement, the stage at which criminally derived funds are introduced in the financial system.
• Layering, the substantive stage of the process in which the property is ‘washed’ and its ownership and source is disguised.
• Integration, the final stage at which the ‘laundered’ property is re-introduced into the legitimate economy.

This three staged definition of money laundering is highly simplistic. The reality is that the so called stages often overlap and in some cases, for example in cases of financial crimes, there is no requirement for the proceeds of crime to be ‘placed’.

Step aside the traditional way of money laundering  and we could see the launderer are using cryptocurrencies in money laundering. While these virtual currencies are often linked to bitcoin because it has also been used by criminals as have most currencies the comparisons are superficial. Bitcoin’s open-source cryptography model, which maintains records of every single transaction, is fairly transparent compared to the black box in which proprietary currencies exist. While bitcoin’s so-called anonymity depends on measures that keep a person’s real identity separate from his or her digital address, these companies rely on layers of offshore companies with concealed ownership to mask their transactions.

Essentially, the internet just makes it easier for everybody to access the existing offshore financial system. While governments can crack down on digital currencies like Liberty Reserve and Perfect Money for violating money transmission rules designed to stop criminals from hiding their ill-gotten gains, the only thing that will really put a dent in money laundering is obstructing companies from hiding their real owners.

Another art of money laundering is using gifcard. Cybercriminals are constantly  seeking ways to withdraw cash in ways that are both easy to execute and difficult to trace by law enforcement. Gift cards are one such method.

The process uses stolen credit card data to buy gift cards and then immediately pass the gift card to the criminal market or purchase legitimate goods with them for reselling. There are also dark web transactions where the customer could place an order for a gift card like a sort of gift on demand. This is attractive to the customer because they can buy gift card for significant discounts, sometimes 70% to 80% off.