Inside the crazy world of drug money-laundering

In ‘Rinsed: From Cartels to Crypto: How the Tech Industry Washes Money for the World’s Deadliest Crooks’ (Penguin Business), Geoff White asks: what would you do with sudden wealth if it came from a source you couldn’t admit to. “You’re faced with an excruciating dilemma,” he writes. “How do you enjoy your huge amounts of cash, but hide its origins?”

The answer is money laundering and in ‘Rinsed’, White reveals how the symbiotic relationship between technology and laundering keeps criminals one step ahead of capture. “Technologists have a conspicuous habit of creating innovations that inadvertently have precisely the kind of attributes money launderers crave,” writes White. 

In ‘Rinsed,’ White reveals money laundering’s three stages, starting with the ‘placement’ into existing financial systems. Then there’s ‘layering’ where it’s mixed with legitimate cash and, finally, it’s new availability. 

“To launder money is to change its history,” explains White.

Technology has “put rocket boosters” under money launderers. 

Citing scores of examples, from Nigeria’s ‘Yahoo Boys’ (so-called for using the company’s free email accounts) to the digital platform Hydra (the dark web “eBay or Amazon”), the explosion in cybercrime makes moving money easier.

And it’s increasingly sophisticated, as the $625 million crypto-heist from Singaporean gaming company, Sky Mavis, in 2022 demonstrates. “What made that sinister was that the technology used to wash the crypto was like a driverless car: an autonomous mixer with no controlling owner,” writes White. 

“It was the perfect technocratic crime.”

With every digital development comes new opportunities for fraudsters – especially when little upfront investment is required. As one police officer tells White: “If you were going to distribute cocaine, you have to buy that cocaine from another smuggler, and you have to put up money. In fraud, what’s your put-up? 

“The commodity you’re selling is BS – cheap, abundant, infinite.”

In that regard, ‘Rinsed’ predicts difficult days ahead.

“There’s an old saying: ‘a rising tide lifts all boats’,” adds White. “It’s usually couched in positive terms… but in money laundering, it offers a dark vision of the future. The better these launderers become, the more crime of all types will be enabled.