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Laundering in Cyber World – The Digital Currency Way


Cyber laundering expected to grow faster with evolution of digital currencies In next decade. This research paper is the classic piece of information about how the ATM frauds have lead to the closure of the digital currency house “Liberty reserve”

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Laundering in Cyber World

Cyberlaundering is the new baby on the blocks. Digital currencies have changed the way money laundering is carried out. On May 28, 2013, U.S. prosecutors indicted seven people in a cyber-crime operation involving a digital currency exchange that allegedly handled more than $6 billion for data thieves, drug dealers, child pornographers, identity thieves, hackers and other criminals, all connected through the anonymous exchange of digital currency. According to U.S. officials, it was the largest money-laundering bust in U.S. history.

Though the indictment was triggered because of attack on two Indian companies, which was termed by media as the “ATM heist”, information about the digital currencies and cyber laundering is available in pieces through media reports.

This report titled “Laundering in Cyber World – The Digital Currency Way” endeavors to explain the role of data theft and digital currencies in the technology driven money laundering operations also termed as Cyber Laundering. This report also highlights the different techniques of money laundering in the online underground black-market.

Indictment of Liberty Reserve represents a sea change in the fight against money laundering, which is the practice of processing money gained through illegal means to gain the legal status. Traditional money laundering has often been a secondary process – preceded by an illegal activity, such as drug trafficking but the liberty reserve case shows that data thefts, hacking attacks and online scams are replacing the traditional crimes and the digital currency is now at the center of the laundering operations. A key element of the process is maintaining anonymity and avoiding transparency throughout the process. Where money launderers were once limited to physical currency, the advent of digital currency has compounded the complexity of the global fight against this activity and Indian regulators and law enforcement agencies need to get themselves prepared for the fight against money laundering.

According to the research conducted by Indiaforensic in the year 2011, the estimated size of money laundering in India was Rs. 18,86,000 crores for the decade started 2000. Now the money laundering is expected to grow even faster with the digital currencies. Digital currencies help to transact online with anonymity.

Research Coverage



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