Technology has changed money-laundering

ON JUNE 2nd Bill Guan, the chief financial officer of the Epoch Times, a right-wing newspaper, was arrested. Prosecutors in New York charged him with laundering $67m, allegedly buying pre-paid debit cards using cryptocurrency. (Mr Guan has pleaded not guilty.) Chainalysis, a blockchain-analysis firm, estimates that $22.2bn in illicit funds were laundered globally using cryptocurrencies in 2023. Despite Western sanctions, Iran, North Korea and Hamas, a terrorist group, all launder funds with crypto.

As Geoff White, a journalist, makes clear in a gripping new book, money-laundering can seem bloodless and abstruse, but it is going to become only more relevant and widespread. That is because technology is making this kind of crime easier—and much harder to detect.

Cleaning dirty money involves three steps. The first is “placement”, getting it into the financial system so it does not sit unproductively under a mattress. During the heyday of Pablo Escobar, a notorious Colombian drug kingpin, in the 1980s, couriers travelled with briefcases stuffed with cash to Anguilla, a Caribbean island with appealing banking-secrecy laws, and deposited it in local banks. Now people can get intermediaries to change stolen funds into bitcoin—or do it themselves—without the need for an aeroplane ticket.