Money Laundering

Definition: Disguising the origins of illegally obtained funds to make them appear legitimate.

Actor:

Formal Groups

Motivation:

Financial

Legal Status:

Illegal in some jurisdictions

Platform ToS:

Violates Policy

Victim Visibility:

Unaware

Classification:

Contextually Sensitive

TSPA Abuse Type:

Regulated Goods and Services: Regulated Services

Online platforms that support financial transactions can inadvertently facilitate money laundering - the use of convolutional financial transactions to disguise the origins of illegally obtained funds. Each of these elements of product design makes this threat more acute:

Capacity for anyone in the world to access or transfer funds. (No Geographic Boundaries)
No (or minimal) identity verification
Use of digital currencies like cryptocurrency that don't have the same oversight from regulators
Lax logging + recordkeeping
No special handling for large sums of money, or frequent transactions

The possibility of a platform being used for money laundering can be dramatically reduced by features that tie digital transactions to real-world people, place limits on the size of transactions, and maintain diligent records.

What features facilitate Money Laundering?

Payments

The capacity for users to initiate outgoing payments or receive incoming ones.

How can platform design prevent Money Laundering?

Identity Verification

Require users to register for an application with a state issued identity document.

Save Extensive Metadata

Recording extensive metadata about sensitive activity can reduce criminal appeal.

Is something missing, or could it be better?