Money laundering goes professional and digital with cryptocurrencies and AI, FATF warns

Money laundering networks are adopting the tools of the digital economy, using cryptocurrencies, encrypted messaging applications and artificial intelligence to move criminal proceeds faster and make them harder to trace, the Financial Action Task Force warns.

A report published by the global body describes the rise of “digital hawala,” an evolution of informal money-transfer systems built around trusted intermediaries. These operators coordinate through applications such as WhatsApp, Telegram and Signal, while customers can start transfers through banks, mobile wallets, fintech platforms and instant-payment systems. Nearly 70% of FATF members surveyed reported seeing new technologies incorporated into these systems.

Virtual assets are also becoming more important. Operators use cryptocurrencies, including stablecoins designed to maintain a stable value, to settle accounts among themselves without physically transferring money between countries. The FATF also points to the use of artificial-intelligence tools and the development of dedicated hawala applications.

The report says underground banks and hawala-like service providers, known as HOSSPs, have become important channels for professional money laundering. They increasingly operate as businesses, with cross-border structures that can move large sums quickly and serve multiple criminal groups. Their services can amount to “money laundering as a service,” with specialists hiding funds in return for a commission.

The networks may draw on lawyers, accountants, auditors, notaries, financial advisers, real-estate agents and company-formation businesses. Money also enters and leaves through ordinary banks, fintech platforms, payment services, virtual IBANs, prepaid cards and virtual-asset wallets. The networks now handle proceeds from fraud, cybercrime, terrorist financing, illegal gambling and other forms of transnational organized crime, not only drug trafficking or smuggling. In some cases examined by the FATF, more than 500 million euros was laundered within a few months.