Introduction
The number of internet users reached about 6 billion in 2025, or 74 per cent of the world’s population, up from close to 1 billion in 2005.1 The widespread reach of the internet has been made possible by the smartphone revolution and the affordability of smartphones, which have sharply reduced the average person’s dependence on computers; according to the GSMA, 4.7 billion people, 58 per cent of the world’s population, now use mobile internet on their own device.2
According to figures compiled by SellCell, 1,844.8 million mobile phones were sold in 2024, of which 1,625 million (about 88 per cent) were smartphones. The impact of the smartphone revolution can be seen in the steady annual rise in sales, with a decisive shift after 2011, when feature phones still accounted for about 73 per cent of sales and smartphones for 27 per cent.3
Individuals often maintain several social media accounts through which they communicate their thoughts and share their activities. According to Statista, the four largest platforms by monthly active users in October 2025 were Facebook (3,070 million), Instagram (3,000 million), WhatsApp (3,000 million) and YouTube (2,580 million).4
The impact of digital networking is immense, and business opportunities have multiplied significantly. With global product information and online purchasing options widely available, one market-research estimate puts the global online shopping market at $6,251.28 billion in 2025.5
The commercial use of cyberspace has given rise to cybercrime, which can be explained by three main factors: the large number of internet users; their widespread engagement with social media platforms, where they share personal and professional information; and the extensive use of financial and banking platforms for monetary transactions. Cybercriminals target victims on the basis of information available to them through social media, either posted and shared by the victims themselves or obtained through data breaches at business and government entities resulting from inadequate cybersecurity measures or flaws in data security software.
In both cases, cybercriminals exploit this information to their advantage, either through cognitive manipulation, which exploits inner fears, greed and impulsive behavior, or through technological breaches, in which technically skilled criminals gain control of victims’ bank accounts.
This paper adopts a qualitative, descriptive approach, drawing its insights from the published studies and official reports it reviews. It aims to identify the cognitive traits and technological vulnerabilities responsible for the majority of cyber frauds, and to propose effective measures that protect potential victims and assist investigative agencies in curbing illicit money laundering. To that end, it examines four aspects: the cognitive dimensions of human behavior linked to potential victimization; the money laundering channels that cybercriminals use to move funds across multiple jurisdictions until they become untraceable; viable preventive measures, based on behavioral analysis and training, to protect potential fraud victims; and the procedural reforms needed to make financial transactions more traceable and to ensure robust identity verification before they are authorized.
Literature review
The digital space invites extensive discussion of its usage, benefits and associated risks across various domains. This paper draws on the existing literature to explore the human behavioral traits that contribute to digital victimization and to establish their association with money laundering conducted through digital platforms to evade enforcement agencies.
The study material falls into two broad categories: material on cognitive traits and material on technological breaches. The material on cognitive traits is further divided into studies of the traits that lead individuals to act in ways that cybercriminals exploit, and experimental studies of human behavior. The material on technological breaches covers the channels through which illicit money is transferred and is drawn primarily from enforcement agencies actively engaged in tracing and recovering illicit funds in money laundering cases.
The introductory section draws on official and industry data to show the extensive reach of the internet and social media. The subsequent sections examine cognitive capacities, beginning with definitions and moving towards a classification based on distinguishing characteristics.
The literature includes Ward and colleagues’ account of the impact of smartphones on cognitive capacity,6 while Van Ouytsel7 and Moh and colleagues8 explore password sharing among friends and in accounts shared with others. Password-sharing practices are further examined by Hassidim and colleagues9 and by Abbasi and colleagues.10 Wash and Rader investigate how internet users create passwords for different purposes,11 and Ezugwu and colleagues discuss end-user experiences, such as forgetting to log out on public computers, that create openings for cybercriminals.12
The issue of individuals who overshare information on digital platforms is addressed by Dupuis and colleagues,13 Shensa and colleagues14 and Shabahang and colleagues,15 who describe the behavioral traits associated with such individuals. Vidal and colleagues group the research on social media use and adolescent depression into four themes.16 The tendency of Generation Z to seek social validation on social media is examined by Susilo and colleagues,17 and Jain and colleagues explain how cybercriminals exploit social media platforms.18 Sanchez-Rola and colleagues investigate click-related behavior on the web,19 while Ellison and colleagues examine how users view and click on social media content.20
The psychology underlying phishing is analysed by Ribeiro and colleagues,21 while Rajivan and Gonzalez22 and Stylianou and colleagues23 examine targeted phishing strategies. Sarno and colleagues use three regression models to explain the association between phishing susceptibility and individual differences.24 Wang and Lutchkus study the psychological tactics of phishing emails, including impersonation,25 and Norris and colleagues examine how fraudulent messages are constructed to exploit specific psychological vulnerabilities.26
The association of low conscientiousness with health-risk habits such as smoking and overeating, and with inflammation, is examined by Sutin and colleagues,27 and Ungvarsky links low conscientiousness with impulsive and disorganized behavior.28 The Big Five personality traits are analysed by Alwahaishi and colleagues in relation to the disclosure of personal information on social network sites29 and by Lampropoulos and colleagues in relation to social media use and engagement,30 while Koloseni studies personality traits, security habits and PIN security among users of mobile money services in Tanzania.31
The technical analysis of illicit money laundering routes and activities is drawn from official reports of enforcement agencies and other documented sources. These include a statement of the Ministry of Home Affairs on cybercrime reporting and investigation in India,32 Council of Europe material marking twenty years of the Budapest Convention on Cybercrime,33 and a 2021 thematic monitoring review under the Council of Europe’s Warsaw Convention on money laundering.34
The use of cryptocurrencies in money laundering is also examined. Bryans identifies five key entities involved in cryptocurrency transactions, taking Bitcoin as the model,35 while Elad compiles statistics on illicit cryptocurrency flows and on the mixers, coin-swap services and exchanges through which such funds, including the proceeds of dark-web markets, are laundered.36 Finally, Schoenmakers and colleagues investigate the attributes that make up a security mindset by studying cybersecurity professionals.37
Cognitive manipulation in cybercrime victims
The word “cognitive” derives from the Latin cognitus, past participle of cognoscere, “to get to know”. It relates to the process of acquiring knowledge and understanding through thought, experience and the senses. In simple terms, it refers to thinking based on learning and understanding.
Cognitive manipulation occurs when an individual’s own thinking and understanding are turned against that individual through psychological tactics that subtly control and alter rational decision-making, eroding critical thinking and fostering a dependence on intuition under the manipulator’s control.
When this is done for monetary gain through indirect communication over internet-based interfaces, so that a manipulator with a fake identity convinces a victim to part with hard-earned money, it constitutes cybercrime.
Cognitive hacking is another term used in this context, where phishing tactics are employed to manipulate decision-making by exploiting the victim’s emotions. This weakens logical reasoning and helps fraudsters to pose as government agencies or to promote fake causes in order to extort money.
Victims of cyber fraud can be classified into two categories. The first comprises those whose own personality-related traits are at fault; they are the easiest targets for cybercriminals. The second comprises those on whom cybercriminals must apply psychological tactics to impair the ability to think logically and to provoke emotional responses to the commands given to them.
Victims in the second category differ in their cognitive skills and respond differently to cybercriminals’ approaches, so they cannot be placed in a common group on the basis of their traits. Cybercriminals must devise individual strategies to induce them to part with their hard-earned money.
Research by Ward and colleagues shows that the mere presence of one’s own smartphone, even when it lies face down or is switched off, reduces two measures of cognitive capacity, available working memory capacity and functional fluid intelligence, because, the authors suggest, part of a person’s limited attention is taken up in keeping it away from the phone. Participants did not lose focus on their task and seldom thought about their phones, yet had less mental capacity left for the task, and this cost was highest for those most dependent on their smartphones.38
Victims in the first category can be further divided by their errors of judgment, where inherent traits drive their actions and choices and so give cybercriminals the opportunity to commit their crimes. This paper elaborates on the faults in victims’ actions and the personality traits associated with them.
Individuals with high interpersonal trust are often gullible and easily fall prey to cyber fraud. Even so, sharing a password is often perceived as a token of trust and friendship.39 This is common in family groups, where the level of trust is high. People who create passwords for accounts shared with others, including coworkers, also often reuse a personal password or a variant of one.40
Similar findings are reported by Hassidim and colleagues, who found that most of the medical staff they surveyed (73.6 per cent) had obtained another staff member’s password, a practice that threatens the privacy of medical data.41 In another study, Abbasi and colleagues observe that while some password sharing between romantic partners is voluntary, partners may also request or coerce access to each other’s social media accounts to guard the relationship against perceived outside threats (mate guarding), often out of jealousy or suspicion.42
Internet users tend to choose more complex passwords for websites holding sensitive information and simpler ones elsewhere, a choice that reflects their perceived security needs rather than ease of use.43 Earlier studies also report that users grow impatient with time-consuming log-ins and that many forget to log out of their accounts, a lapse that can lead to account compromise, especially on public computers.44
Another feature of the digital age is the oversharing of information on social media, which can lead to online shaming, cyberbullying, identity theft and cyber fraud. Oversharing means disclosing details of one’s own private life, or that of others, beyond reasonable limits.45
Oversharing may take the form of sharing excessive personal information or of posting too frequently about one’s surroundings.46 Popular social media platforms such as Facebook and Instagram are often used to satisfy inner urges, such as the desire to be seen as rich and famous, popular within a group, a leader within a circle, attractive and successful, or powerful and dominant. These are just a few examples of emotions overriding rationality, leading individuals to share sensitive material and make themselves vulnerable to cyberattacks.
Scammers look for vulnerability, and they have been found to target people experiencing isolation, loneliness, chronic illness, disability, advanced age and financial hardship, some of whom may be targeted because they spend longer periods online.47
Dupuis and colleagues further find that younger users and people high in neuroticism and extraversion are more likely to overshare on Facebook. By contrast, openness shows no significant relationship with oversharing, while conscientiousness and agreeableness are both associated with less of it.48
One of the key reasons for social media use is the expectation of emotional support, with online networks often replacing offline relationships. In the search for happiness and meaningful relationships, individuals may devote excessive time to social networking platforms. Excessive online engagement can, however, harm offline relationships, and research shows that heavy users of social media may actually feel less, not more, emotional support. Oversharing, especially by users with low self-esteem, can draw negative responses from friends and reduce relationship satisfaction.49
Vidal and colleagues group the research into four themes: the quantity and the quality of social media use, the social aspects associated with it, and social media as a tool for disclosing mental health symptoms, which may help to predict depression and suicidality. The review finds an association between social media use and depression in adolescents, and notes that social media content may help to detect symptoms of depression.50 These issues are also visible to scammers, who exploit such personal vulnerabilities.
Susilo and colleagues studied oversharing among Generation Z and found it driven by the need for social validation, fear of missing out (FOMO) and the desire for a strong digital presence.51 They add another dimension to Brammer and colleagues’ definition of oversharing by including overindulgence in a single topic. Social media platforms also allow users to remain anonymous and to post freely without remorse or guilt. The belief that freely expressing and sharing personal feelings will win sympathy or appreciation within an online circle boosts confidence and encourages individuals to share more deeply. Excessive self-disclosure, however, often backfires, leading to depression and psychological distress.
In 2012 Facebook itself estimated that more than 83 million of its 955 million accounts, or 8.7 per cent, were illegitimate, whether duplicates, misclassified profiles or “undesirable” accounts such as those under fake names used for spamming, while Jain and colleagues, citing Internet Live Stats, put the number of websites hacked daily at around 100,000.52 The personal information shared online is precisely what scammers need to target their victims. Jain and colleagues classify threats into three kinds, conventional, modern and targeted, before discussing protective measures. Conventional threats include spam, malware, phishing and identity theft; modern threats include clickjacking, hijacking, de-anonymization, inference attacks, profile cloning, cyber espionage and cross-site scripting; and targeted threats include cyberbullying, cyber-grooming and cyberstalking.53 Attackers exploit social media for three main reasons: its scale, its trusted nature and its invisibility to security teams.54 Shabahang and colleagues suggest that anxiety, attention-seeking and problematic use of social media may predispose adolescents to overshare personal information, exactly the data cybercriminals are looking for.55
Clicking on malicious links remains a central vector of cyber fraud, particularly on social media. Sanchez-Rola and colleagues trace the click-related threats they identify to two possible explanations: flaws deliberately introduced by developers, or the unintended result of poor practices and coding mistakes.56 Both expose users to significant risk, either by obscuring the real destination of links or by failing to provide enough information for an informed decision. This lack of transparency facilitates deceptive practices, allowing cybercriminals to exploit user trust, especially on financial platforms and websites with established reputations.
Expanding on patterns of user interaction, Ellison and colleagues examine how individuals engage with content on social media, and in particular how they decide whether or not to click on it. Their typology distinguishes Engaged Clickers (high interaction, high viewing), Indiscriminate Clickers (high interaction, low viewing), Unengaged Lurkers (low interaction, low viewing) and Engaged Lurkers (low interaction, high viewing).57 On this typology, indiscriminate clickers, who interact without close viewing, would appear the most exposed to malicious content. Clicking behavior is also shaped by gender, network composition and the motivations for using social media.58
From a behavioral and psychological perspective, Frauenstein and Flowerday show that phishers manipulate social networking sites to induce users to click on harmful links, exploiting controversial or significant events that attract public interest or trigger emotions.59 Their study of the Big Five (OCEAN) personality traits distinguishes two ways in which users handle what they see: quick judgement based on surface cues (heuristic processing), which made users more likely to fall for phishing, and careful scrutiny (systematic processing), which had no significant effect either way. Conscientiousness was the trait linked to lower susceptibility: conscientious users relied less on surface cues and were therefore less likely to be phished. Agreeableness, a trait marked by trust and cooperativeness, was associated with both quick and careful processing, as were neuroticism and openness, which the authors suggest may explain why earlier studies of these traits disagree. Extraversion had no significant effect, although the authors had expected extraverts to respond impulsively.60
Complementing these findings, Ribeiro and colleagues reveal a paradox in user susceptibility: people who believe they are good at detecting phishing, and those who make greater use of internet services in their routine activities, are more susceptible to it.61 This overconfidence, coupled with frequent exposure to online environments, increases the likelihood of overlooking subtle signs of malicious intent.
The integration of psychological insights into cybersecurity has significantly improved the understanding of user susceptibility to phishing. Stylianou and colleagues emphasize the role of group pressure and majority influence, under which users often yield to the majority even when they believe their own judgment to be correct, and of authority, under which instructions that appear to come from an authority figure are frequently followed without any check on their authenticity.62
On the basis of their analysis of selected real-life phishing emails, Wang and Lutchkus find that appeals to the principles of authority and reciprocation are the most common psychological tactics. They add that artificial intelligence tools can make impersonation attempts highly credible, which further complicates mitigation.63
Expanding on predictive factors, Sarno and colleagues use three regression models to predict the ability to tell phishing from legitimate email: (1) an age model, (2) a deficient self-regulation model covering impulsivity, response time and curiosity, and (3) a personality model based on the Big Five traits. The findings indicate that phishing susceptibility is positively associated with higher levels of extraversion and impulsivity, younger age, and faster response times, while it is negatively associated with agreeableness and openness to experience.64
Similarly, Rajivan and Gonzalez find that phishing attacks are more successful when attackers persist with specific strategies, such as sending notifications, adopting an authoritative tone, exploiting trust by impersonating a friend, expressing shared interests and communicating failure, than when they vary their strategy from one attempt to the next.65
Further analysis by Stylianou and colleagues shows that the Majority Size technique, measured by their Comprehensive Compliance Increase Rate (CCR), is particularly effective where initial compliance is low, while techniques based on authority, commitment and consistency, and reciprocity also prove highly effective.66
The psychological basis of phishing susceptibility is reinforced by Norris and colleagues’ systematic review, which finds that fraudulent messages are targeted to appeal to specific psychological vulnerabilities; time-limited communications, for instance, are designed to trigger peripheral rather than central information processing, which reduces critical evaluation.67 Scammers typically target a broad audience to identify individuals who respond to such stimuli without reflection, and then subject them to increased pressure in later stages to take decisions that benefit the attacker financially.
Individual personality traits and behavioral tendencies significantly influence susceptibility to such attacks. Less organized individuals, or those lacking self-discipline, tend to exercise less caution and are therefore more vulnerable to scams. Similarly, individuals driven by curiosity or greed are more likely to open attachments from untrusted sources, particularly when the content creates a sense of mystery that overrides rational decision-making. Low conscientiousness is associated with health-risk habits such as smoking, overeating and a sedentary lifestyle,68 and with impulsive and disorganized behavior in daily life.69
Empirical findings on the relationship between personality traits and the disclosure of personal data remain mixed. Alwahaishi and colleagues find that, among the Big Five personality traits, only agreeableness has a direct positive effect on the disclosure of personal information, and that none of the traits moderates it.70 By contrast, Lampropoulos and colleagues identify openness and extraversion as the two most significant positive predictors of social media use and engagement.71 The difference may reflect methodology, since Alwahaishi and colleagues report a primary survey while Lampropoulos and colleagues review the literature.
Supporting the role of personality in security behavior, Koloseni reports that conscientiousness, openness to experience, extraversion and security habits influence PIN security practices among users of mobile money services in Tanzania, while security habits are themselves influenced by conscientiousness, agreeableness and neuroticism, indicating a complex interaction between personality traits and habitual behavior.72
On security maintenance, Rajivan and colleagues examine why individuals delay installing security updates. In their experiment, people learned from experience to delay updates, and both the cost of the update and individual risk preference predicted delay: people more willing to take risks were more likely to neglect updates and keep the status quo.73 Conversely, individuals with a stronger sense of responsibility towards their work are more proactive in updating their electronic devices, while those seeking zero-cost solutions or taking high risks are particularly inclined to avoid updates.
Beyond financial considerations, behavioral factors also play a crucial role in update adoption. Resistance to change, difficulty in processing information (especially among older individuals) and impatience among younger users contribute to neglect of cybersecurity practices. Procrastination, lack of discipline and limited maturity further exacerbate the problem. Ultimately, decisions about system updates and investment in antivirus software are strongly influenced by an individual’s ability to perceive risk and awareness of potential cyber threats.
Technical analysis of illegal money laundering activities
The resources available to cybercriminals for conducting illegal financial transactions across national boundaries are vast and complex. These transactions often span multiple bank accounts and involve various payment modes, including different currencies, e-wallets, vouchers, cryptocurrencies and prepaid cards. Such diversity significantly complicates the tracing of illicit funds. Moreover, effective investigation requires coordination among multiple national criminal investigation agencies operating under distinct legal frameworks, which leads to procedural delays. These delays give cybercriminals enough time to disperse illicit funds beyond their jurisdictions, rendering them virtually untraceable.
The cyber domain carries not only money illicitly obtained from individual victims but also proceeds of drug trafficking, ransomware attacks, terrorist financing, tax evasion and other unlawful activities. Even funds from legitimate businesses are sometimes routed through these channels to obscure corrupt practices prevalent in many economies. Overall, cyber-based financial transactions form a crucial component of broader money laundering networks. These networks often involve financial institutions such as banks, payment and remittance service providers and virtual asset service providers, and they employ sophisticated techniques to conceal the origin of illicit funds.
Cybercriminals derive significant support from virtual financial service providers that allow them to open online accounts in foreign jurisdictions with minimal due diligence. At the same time, they recruit “money mules”, individuals in financial need who permit cybercriminals to use their identities to open bank accounts for illicit transactions in exchange for a percentage of the proceeds. Cybercriminals are often well-educated and technically competent professionals who operate under the guise of legitimate service providers while offering illegal services to clients seeking to process illicit funds.
The possible involvement of professionals such as lawyers, accountants, financial and tax advisors, company secretaries and bankers, often operating within organized networks or under the cover of legitimate consulting services, further strengthens these illicit ecosystems. Their ability to help clients convert illegal funds into ostensibly legitimate assets, or to evade tax authorities, enhances their appeal within the criminal underworld.
Traditional money laundering methods, such as hawala and gold smuggling, require the physical movement of cash and people and therefore involve higher risk. Cyber-enabled channels, by contrast, are comparatively safer and more difficult to trace because of the involvement of multiple foreign jurisdictions and the use of anonymity-enhancing technologies such as Virtual Private Networks (VPNs) and The Onion Router (Tor) to reach the dark web. In this environment, cybercrime increasingly adopts a service-based model, with specialized actors offering distinct services within the broader money laundering ecosystem.
Illegal call centers also operate across the globe, providing services across different time zones. They often function from rented premises, which allows frequent relocation and continual changes of IP address to evade detection.
Law enforcement agencies face the challenging task of tracing, securing and recovering illicit proceeds, as cybercriminals employ sophisticated techniques such as smurfing and account hopping across multiple jurisdictions. These activities often involve transferring funds through different account holders in various countries and converting them into diverse financial instruments, including e-money, prepaid cards and virtual assets. In the course of these transactions, mule-operated accounts are frequently used to withdraw cash at ATMs or to buy high-value goods that can later be resold for cash. Common money laundering techniques also include false or inflated invoicing for consultancy services, and the purchase of easily disposable valuables or goods that can be carried across borders and sold to legitimize the proceeds.
The emergence of cryptocurrency has further facilitated global illicit fund transfers. The increasing use of Bitcoin ATMs, along with varied identifiers, such as different dates of birth or phone numbers, during deposits and withdrawals, complicates enforcement. Obfuscation techniques such as mixers or tumblers make it difficult to trace the original source of funds. Decentralized finance (DeFi) platforms, which run on blockchain-based systems for lending, borrowing and trading without reliance on traditional banking networks, give criminals multiple layers of protection and ways to obscure or erase the digital footprints of their activities.
Even legitimate financial instruments are often exploited for illegitimate purposes. Virtual International Bank Account Numbers (vIBANs), for instance, which financial institutions issue to facilitate and categorize payments from multiple sources, can be misused to reroute and consolidate funds from numerous accounts into a single account. This practice effectively masks beneficial ownership by fragmenting and nesting transactions across payment networks, concealing critical information that could otherwise lead to the identification of the perpetrators.
Discussion
A. Technological measures
Tracing money trails, verifying each account and applying withdrawal and conversion checks to confirm identity are essential, so that links can be established in the event of a scam. Overall, robust safeguards must be put in place to prevent money from vanishing. Although various enforcement agencies work at a multilateral level to trace and recover fraudulent funds, the best chance of stopping a fraudulent transaction is widely regarded as lying within the first 24 to 72 hours after the fraud begins.
B. Psychological trait analysis
Individuals within certain age groups who possess specific psychological traits may be more susceptible to fraud. To identify such individuals, a brief psychological assessment before an account is opened may be necessary. This would enable institutions to provide an additional layer of protection or offer insurance coverage suited to their specific needs. Categorizing customer accounts by the risk associated with their operation allows banks to provide enhanced security measures and to allocate the costs of maintaining such protection, including the option of integrating insurance coverage.
C. Awareness and incentive-based measures
Training sessions and information campaigns about cybercriminal activities are beneficial but not entirely effective, as customers often lack the time and understanding to grasp intricate security details, even when these are in their best interest. To reinforce security awareness, banks could impose additional charges on accounts classified as high-risk while offering discounts to customers who demonstrate greater awareness. Periodic evaluation of customer awareness could further strengthen this approach. A knowledge score based on regular psychological assessments, conducted at set intervals during which major and minor updates are provided, could be used to evaluate the risk component and either to offer discounts or to levy the additional maintenance and service charges needed to protect the customer’s account.
A policy of offering discounts and charging for additional protection may encourage customers to adopt secure practices. Its effectiveness, however, depends on uniform implementation across all banks, either by mutual agreement or at the direction of the central bank. Otherwise, instead of serving as a protective mechanism, it may create competitive imbalances, with customers shifting between banks for convenience.
The strategic approach requires coordination among various arms of government, including enforcement, judicial, regulatory, and information and communication bodies. Investigative agencies need a multifaceted approach to deciphering digital forensic evidence, which comprises IP addresses and identifiers linked to internet domains. The European Financial Intelligence Public Private Partnership (EFIPPP) is widely described as the first transnational public–private information-sharing mechanism. It brings together law enforcement agencies, Financial Intelligence Units (FIUs) and private entities from EU and non-EU countries to address cyber fraud threats.
In India, the Citizen Financial Cyber Fraud Reporting and Management System (CFCFRMS), which operates under the Indian Cyber Crime Coordination Centre (I4C) alongside the National Cyber Crime Reporting Portal (NCRP), was launched in 2021 for the immediate reporting of financial frauds and to stop fraudsters from siphoning off funds, by integrating financial entities such as banks, e-wallets, payment aggregators, payment gateways and e-commerce platforms. Its aim is to initiate immediate action on complaints reported through it. By 31 December 2025, more than ₹8,189 crore had been saved in more than 23.61 lakh complaints, while 24,02,579 financial fraud complaints involving ₹22,495 crore were reported on the NCRP in 2025 alone.74
INTERPOL, with 196 member countries, remains the principal channel of international police cooperation against crime, including cybercrime.75 A more specialized and focused effort, the United Nations Convention against Cybercrime, was adopted by the General Assembly on 24 December 2024.76 As at 24 October 2026, however, it had 96 signatories, India among them, but only three parties, and it was not yet in force.77 Critics have argued that the Convention may curtail freedom of expression and widen state and global surveillance, and many countries continue to rely on their domestic agencies to combat cybercrime within their own jurisdictions.
D. Legal challenges to cyber fraud
Tracing cybercrimes is difficult, but proving the involvement of cybercriminals is far more challenging, as digital evidence is wrapped in multiple layers. With the passage of time, such evidence loses its relevance in the absence of recovery and definitive leads linking the accused to the crime. In many cases, investigative agencies can trace only mule accounts, whose holders are often unaware of the fraudulent activities carried out through accounts registered in their names. The inability to prove mens rea is one of the fundamental challenges. To address it, some jurisdictions have introduced provisions that bring knowledge and suspicion within the scope of participation in a crime.
The Budapest Convention provides a framework for cooperation and establishes procedural powers among its Parties.78 Similarly, Article 9(3) of the Warsaw Convention allows each Party to make money laundering an offence where the offender suspected, or ought to have assumed, that the property was proceeds of crime.79
E. Cryptocurrency and the extension of money laundering
The traditional routes of money laundering, such as money mules, offshore accounts, smuggling channels and fake invoicing, are well known to investigative agencies and carry higher risks for individuals. By comparison, the transfer of cryptocurrency across national boundaries, coupled with the deletion of digital footprints, rapid multiple transactions and rerouting through numerous accounts, helps to conceal identity and delay investigation. This provides enough time to withdraw illicit funds from the system or convert them into legitimate forms, evading punitive action.
Because cryptocurrencies are not recognized as legal tender in many countries, laws applicable to money laundering may not be strictly enforceable against them in a legal sense, and in such jurisdictions cryptocurrencies often remain outside the scope of financial supervision. Nevertheless, mechanisms for exchanging national currencies and cryptocurrencies are widely available across the globe. A typical Bitcoin transaction, including one used to launder money, involves approximately five entities: the sender, who initiates the transaction on the network; the receiver, who accepts the bitcoins (in a laundering scheme, the launderer who helps to obscure the source of the money); the miners, who verify and process transactions by completing blocks, sometimes for a nominal fee; the core Bitcoin development team, which updates the Bitcoin codebase as necessary; and the currency exchanges, which convert bitcoins into other currencies and vice versa.80
Cryptocurrency is based on blockchain technology, which reduces the need for traditional banking intermediaries, as Bitcoin transactions are conducted directly between digital addresses. Although the blockchain maintains a verifiable ledger that is publicly accessible, it still preserves a degree of anonymity because these addresses are not directly linked to individuals. Each transaction can involve newly generated addresses with unique identifiers, accessible only to the owner through secure login credentials.
Opening a bank account, by contrast, requires verifiable personal information and takes time to become operational, which leads criminals to prefer cryptocurrencies over conventional banking channels for illicit activities. The primary limitation of blockchain technology, from the criminal’s point of view, is that historical transaction data is permanently recorded and publicly available. Despite this transparency, tracing individuals remains difficult because wallet addresses do not reveal real identities. Individuals can also generate multiple wallets and split funds among them, a practice known as address hopping, while using mixing and tumbling services. Certain cryptocurrencies are specifically designed to conceal transaction data, and illicit funds are often transferred across multiple blockchains and routed through exchanges with weaker customer identification standards.
Chainalysis estimates that illicit cryptocurrency addresses received $40.9 billion in 2024, a lower-bound figure that it expects to rise, possibly to about $51 billion, as more illicit addresses are identified.81 The Onion Router (Tor), which provides anonymous browsing, is widely exploited by cybercriminals to reach underground markets on the dark web and conduct illegal transactions.
The use of cryptocurrencies serves two primary purposes for criminals: first, it significantly enhances their ability to obscure money trails; and second, transactions typically pass through one or more intermediary addresses before funds are finally withdrawn for spending, which further complicates traceability.
Koloseni explains his findings by suggesting that conscientious individuals are more likely to avoid insecure behavior in order to protect their banking and financial data.82 They tend to follow best practices in generating secure PINs and safeguarding their electronic devices. Agreeable individuals also adhere consistently to safety norms, while those high in neuroticism are generally more anxious and worried and may therefore be more inclined to adopt secure practices, such as regularly changing PINs and taking extra care when sharing information on social networks. Extroverted individuals are socially active and may be aware of e-security issues, but they may still engage in risky behaviors such as using weak passwords. Another perspective suggests, conversely, that extroverts may seek to avoid risks by adopting the latest technical knowledge.
Schoenmakers and colleagues study cybersecurity professionals to identify the qualities that make up a security mindset. Three aspects emerge: first, the habitual, often unconscious, monitoring for potential security flaws; second, the conscious investigation of systems to detect such flaws; and third, the evaluation of the seriousness of a given flaw within a broader context.83 This integration of monitoring, investigation and evaluation forms the foundation of a cybersecurity expert’s mindset, but a similar security-oriented mindset is also employed by cybercriminals.
Conclusion
The rapid expansion of digital technologies and their integration into the global financial system have created new investment and income-generating opportunities for individuals with the means and willingness to use them. The same expansion has, however, given criminals sophisticated tools to obscure financial trails, evade detection and accelerate the cross-border movement of illicit funds through digital currencies, blockchain networks and anonymization techniques. Although traditional methods of money laundering remain relevant, the digitalization of financial systems has created significant challenges for law enforcement agencies, which now face the complex tasks of tracing transactions, establishing jurisdiction and proving criminal intent (mens rea).
This paper focuses on cognitive manipulation techniques, emphasizing individual behavioral traits as primary determinants of victimization in digital fraud. It argues that individuals with conscientious traits are less likely to engage in insecure behaviors and are generally more aware of the measures needed to safeguard their banking and financial data. On the basis of assessments of individual vulnerability, it proposes a differentiated framework of service charges and digital fraud insurance for individuals identified as having a higher probability of victimization. Such measures would provide an additional layer of technological and personal protection, along with financial cover for potential losses.
The assessment mechanism may be analogous to the due diligence that financial institutions carry out when issuing loans, in which the probability of repayment is evaluated. Here, however, the focus shifts to the likelihood of an individual becoming a victim of cyber fraud, determined through psychological profiling and an evaluation of digital security awareness. Individuals with a higher assessed risk may be subject to increased service charges, whereas those with lower risk profiles may benefit from reduced service and maintenance fees.
The second part of the paper addresses the investigative challenges faced by international law enforcement agencies in tracing illicit financial flows. It highlights the technical difficulties of establishing financial trails, verifying digital footprints and reconciling differing jurisdictional requirements within the short timeframes needed to detect and recover illicit funds and to identify and apprehend those involved in such transactions at various stages. The study advocates not only closer cooperation among national agencies but also a coordinated international legal framework, potentially administered by a dedicated global body, to expedite investigation and enforcement.
The findings also underscore the need to identify fraudulent or high-risk accounts, particularly those whose holders have not provided sufficient identity verification, which impedes traceability in cases of cyber fraud. Beyond strengthening identification protocols, the financial system should incorporate mechanisms to regulate and, where necessary, delay the transfer of funds at each transactional stage until the legal requirements of traceability and accountability are fully satisfied. In April 2026 the Reserve Bank of India (RBI) issued a discussion paper on safeguards in digital payments to curb fraud,84 which proposes, as one option, a one-hour delay on account-to-account transfers above ₹10,000 made through fast payment systems such as UPI, with merchant payments excluded, so that customers have time to cancel a fraudulent transaction.85 Although such measures may slow financial transactions, particularly across international borders, they would significantly enhance transparency, ensure traceability, and allow legitimate transactions that meet established compliance standards to be prioritized and processed quickly.
It is essential to monitor the behavioral traits that increase an individual’s susceptibility to cybercriminal targeting, alongside the evolving mechanisms offenders use to transfer illicit funds. Robust verification processes play a critical role in tracing the digital footprint of criminal activity, establishing accountability and enabling the effective enforcement of legal measures against those involved in such transactions. Both behavioral and technical safeguards are indispensable for the prevention and control of cybercrime, and achieving this requires continuous upgrading of knowledge. Individuals must either invest in appropriate security measures or proactively update their awareness and practices to protect their financial assets.
In conclusion, the effective mitigation of cybercrime requires the integration of technological innovation with legal reforms aligned to international cooperation frameworks. Equally important is the identification and analysis of the behavioral patterns, cognitive biases and psychological traits prevalent among cyber fraud victims, which must be addressed systematically to strengthen individual resilience and provide comprehensive protection against cyber threats.
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Footnotes
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48. Id.
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82. Koloseni, supra note 31.
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84. Press Release, Reserve Bank of India, RBI Invites Public Comments on Discussion Paper: Exploring Safeguards in Digital Payments to Curb Frauds, Press Release No. 2026-2027/57 (Apr. 9, 2026), https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=62535.
85. Reserve Bank of India, Discussion Paper on Exploring Safeguards in Digital Payments to Curb Frauds, Option 1, §§ 1.2, 1.4 (Apr. 9, 2026), https://www.rbi.org.in/Scripts/PublicationsView.aspx?id=23810; see also Aninda Chakraborty, Indian Central Bank Proposes Transaction Lags amid Surge in Digital Frauds, Electronic Payments International (Apr. 10, 2026), https://finance.yahoo.com/economy/policy/articles/indian-central-bank-proposes-transaction-070430526.html.