Crypto casinos are popular gaming platforms. However, few people know that some criminals use these gaming venues for money laundering.
How do they use these platforms? How does money laundering work?
This article will answer your questions.
What is money laundering?
Money laundering is the attempt to pass off dirty money as clean money.
Dirty money refers to any funds obtained from illegal activities. These activities can include drug trafficking, bribery, theft, tax evasion, and more.
Clean money refers to funds from legal activities such as legal employment, real estate investments, winnings from a licensed casino, and more.
Money launderers usually use legal activities as a façade to ‘clean’ their dirty money.
For example, they might:
- Set up a fake business and use it to declare earnings from illegal activities.
- Invest in real estate to launder money — they might purchase properties in cash and sell them to do so.
This can happen anywhere in the world. It happened in Canada, for example:
The Cullen Commission uncovered a huge money laundering scandal. The report found that criminals had been using Vancouver’s real estate market to launder billions of dollars.
Real estate is just one of the markets that money launderers rely on. They also like to use other markets and venues.
Some of these are crypto casinos.
What are crypto casinos?
Crypto casinos are online casinos. However, unlike most online casinos, they only accept cryptocurrencies. To start gaming, players usually need to pay with Bitcoin or Ethereum. Some crypto casinos might also accept other, lesser-known cryptocurrencies.
But why do some people choose crypto casinos? What are some of the advantages of using them?
Some gamers prefer crypto casinos because they offer more privacy. With cryptocurrencies, a player’s gaming habits will not directly show on their credit card account. Their bank will not know they’re spending money at an online casino — only that they bought cryptocurrencies.
Another advantage is the speed of transactions. Funds can be sent and received almost instantly. In contrast, processing times with regular currencies tend to be longer, as banks need time to register, track, and approve incoming and outgoing payments. Some banks even restrict payments outside working hours or on weekends, which makes crypto a more convenient option for some players.
Additionally, some players choose crypto casinos because they can offer lower transaction fees. However, this can vary depending on the type of bank and card one has.
Why are crypto casinos used for money laundering?
Crypto casinos are particularly at risk of money laundering for the same reasons that they’re attractive. However, the main reason is that they offer a lot of privacy. The decentralized nature of cryptocurrencies helps criminals stay untraceable.
With cryptocurrencies, it becomes tough to trace criminals’ transactions and flag unusual behavior. Criminals can deposit a lot of money into their crypto casino accounts and withdraw it within days.
By withdrawing funds from crypto casinos, they’re laundering them. Once those funds arrive in their bank account, they look like legal gaming earnings. The source of that money becomes traceable and linked to a legal business.
Of course, many crypto casinos are now looking for these types of individuals.
To remain inconspicuous, criminals will usually:
- Create several gaming accounts
- Use fake identities or stolen identities if necessary
- Deposit small amounts instead of one huge amount
- Bet small amounts in games to make their gaming account look real
- Work in tandem with other players to manipulate games (e.g., placing coordinated bets, purposefully losing to an associate to transfer some funds to them)
Some innocent players might play a casino game manipulated by money launderers. Games that are likely to be manipulated include poker and online blackjack.
Criminals like to use chip dumping to launder money at these table games. They purposefully lose their chips to a seemingly random player — one of their associates.
The best way to avoid playing a compromised online blackjack game is to play with a reliable provider.
Reliable providers usually have systems to regulate and prevent money laundering attempts on their platforms. They might rely on more traditional payment methods to discourage money launderers from using their platforms.
Final thoughts
This article explains that criminals sometimes use crypto casinos to launder money. If you’re interested in casino gaming, pick a reliable provider.
