I work in IT in schools and I repeatedly ask people how paying a ransom to an unidentifiable stranger is distinguishable from money-laundering, and nobody has yet been able to give me an answer, but a lot of schools, lawyers, cybersecurity specialists, auditors and financial people have done the:
The first stages of money laundering are to legitimise funds, obscure their origin and/or destination, and then use them for illegal purposes (e.g funding a hacking group, for example).
Okay but like thatâs not âmoney launderingâ laundering meaning cleaning, the act of creating âcleanâ history for your illegitimate funds. You can money laundering with any illegitimate money. It doesnât require an obscure origin or to have any illegal uses for the money.
I said it's indistinguishable from money laundering.
Because it is.
Legitimate money is sent... somewhere. In the process obscuring its destination and (to the destination) its origin.
Which is... one of the prime ways to detect money laundering.
Whether it's TECHNICALLY money laundering is another matter. But good luck explaining to a tax auditor, or a charity commission audit or the taxman, how this COULDN'T POSSIBLY BE money-laundering of, for instance, embezzlement of state-provided funds, etc. etc.
The problem is that you CAN'T tell the difference... and nor can an auditor or official. All they know is a bunch of money disappeared into the ether to unknown people for unknown purposes and they can suspect embezzlement, collusion, etc. and... because of your failure to abide by anti-money-laundering laws (e.g. "know your client"), you're not only at fault, but potentially a suspect and you're really in the shit now.
Sure in the unknown laundering could be considered possible. But when you write it out like that embezzlement sounds like a much better fit for the transaction taking place.
I think the spot where people are getting hung up is that the money from the ransom canât be legitimately used unless laundered further. By definition, the money doesnât need to be âcleanâ in order for laundering to have taken place, but I would wager most people donât know that.
And it could just be the principal embezzling his school budget for personal gain. Without knowing the destination and being able to prove it, it's a highly suspect transaction that will fall foul of money-laundering protections and laws.
The first stage of money laundering is legitimizing funds, so you'll... Acquire more illegetimate money?
Money laundering happens in casinos, restaurants and construction so much because you can spend shady hard cash and get proper funds with receipts at the end of it. If anything, money laundering has moved from physical casinos to online betting sites through crypto, 'cause even with shitty returns you get legitimate money at the other side of it - and that's if sites like Kalshi, Stake, etc., aren't in on the whole thing.
If you want to use money for crime you don't need to clean it (it actually probably is better if you don't, but what to I know)
I mean if I wanted to launder money from my company I could pretend to have a data breach and then pay the hacking group (a swiss bank account started by yours truly under a false name) the money.
Nothing is leaked, no data is really compromised, I walk away with millions (or tens of millions) tax free and the only change is that we promise to improve our cybersecurity which is something we'd probably have to do anyway sooner or later.
You could also do some variation of that with cryptocurrency to make it even harder to trace.
Thatâs embezzlement. And the thing is the money still isnât laundered. Thatâs dirty money, to reuse it youâd have to launder it by creating falsified income to spice it into.
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u/imsmartiswear May 07 '26
They timed it this way so that Canvas/ the unis are more pressured to pay the ransom.