Money laundering on the internet.

When I lead training sessions, workshops, or discussions on topics related to payments or fintech, whenever I bring up money laundering, suddenly everyone gets more engaged.

It’s quite interesting — everyone starts listening and participating actively 😎

Of course, it’s a highly controversial topic.

And also incredibly fascinating.

From the perspective of a “normal” person: it’s a very cinematic, attractive topic, thought-provoking, and leaving a lot of room for the imagination to roam.

From the perspective of business: it’s a huge risk that could jeopardize a company and cause serious turbulence.

From the perspective of financial institutions, payment providers, and fintechs: it’s a risk that must be minimized; poorly managed, it could lead to problems that many won’t be able to handle.

So, what is money laundering all about? In simple terms, it’s about introducing “dirty money” (money from criminal activities or simply untaxed) into the legal economy.

What does money laundering through the internet involve? It’s about using the internet, tech companies, and IT tools to carry out the act of laundering dirty money.

How is this done? There are, of course, many ways to do it, each of which could be discussed for hours. But simply put, on one side you have a payment instrument with dirty money, and on the other side, you have a recipient who may or may not be aware of it.

The payment instrument could be a prepaid card, an e-wallet, or any other instrument on which you can deposit money. Ideally, it’s an instrument that doesn’t require extensive verification and can accept cash deposits.

The recipient of the money is the actual business selling online or a front business pretending to be one.

The most popular online business models that relatively easily find themselves in this process (on the recipient’s side) are:

1/ Hosting companies, clouds, virtual drives, and businesses providing online space

2/ SaaS companies offering virtual services

3/ E-commerce businesses selling digital products (e.g., ebooks, courses)

4/ Various crypto assets, from NFTs to tokens to cryptocurrencies

5/ Online lotteries and casinos

6/ Online gaming

7/ Marketplaces, especially those allowing the sale/purchase of digital goods

So, pretty much every type of online business.

And each one of them could have its own lengthy discussion.

Which I intend to do in the coming days.

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