Forex investing caution: How money laundering works?

Before investing, all possible risks should be analyzed, enabling us to create a contingency plan. In forex investing, it is necessary to check the forex broker’s credibility before choosing. Looking at all possible risks also means checking out the brokerage’s legality to operate.

With all the scam and fraudulent companies existing worldwide, becoming a victim should never be your choice. In this post, we’ll explain one of the usual swindling happenings  around the globe – money laundering.

Familiar with the TV series “Breaking Bad” where Walter White’s illegal meth money legitimize via car wash? Well, that’s how this type of swindling goes.

Why do I need to be cautious with money laundering activities?

Fact is, anyone, can launder money and a lot of them are present worldwide. United Nations Office on Drugs and Crime estimated that between $800 billion and $2 trillion, two to five percent of the global GDP are getting laundered every year. Now, while those people are making more money, you being an investor can be one of the victims on the act.

In a simple explanation, money laundering is the method of converting illegal profit money into legal profit money.

For instance, a scam brokerage gets your money while making you believe that it is on trade. Most scam trading rigs their offered platforms, showing that your money loses on the market trade. The owner of the scam brokerage will then convert the laundered money into a business making it look legal on the eyes of the authorities.

The whole process of laundering includes three steps, involving long and complicated processes. Cleaning the money and making the process untraceable. Let us elaborate the three-step plans:


The part where launderers bring dirty money towards the real financial world. The most critical step for it usually involves shifting a large amount of cash. There are various ways to do this. Mostly, they are used to pay loans, to gamble or to make a legal-looking cash business (such as a car wash or strip club). Others also exchange it for foreign currency or buy a real estate.


The stage where it involves moving the money around to hide its real source. A large amount of money laundering will include critical money movements. They often choose to transfer it on overseas financial products, businesses, investments, etc. It usually happens on diverse product or businesses (that’s why it is called “layering”). In theory, the launderer moves the money to one oversea account, then transferred it on a specific business continuously until its dirty source is hard to trace.


The part where the launderer gets the money from a legal-looking source. There are also various ways to do it by not getting any suspicions from authorities.  Launderers mostly use it to buy or, sell a property, etc.

There are a lot of federal crimes happened in the United States called “specified unlawful activities.” Soon, before planning to invest in a brokerage, make sure to check the risks to avoid those scam forex brokerage. If there are no victims, these criminals will end soon.

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