Bitcoin successfully served a decade with mixed legal scenarios from several countries across the world. However, the anonymity feature that it offers worries the regulators as criminals and hackers use it to hide their identity and perform illicit activities.
The latest report from a Blockchain analytics firm Chainalysis reveals that it has traced $2.8 billion in Bitcoin sent to crypto exchanges by criminals last year. Noticeably, criminals sent major funds to Binance and Huobi. More so, Chanalysis tracked that the funds were transferred via criminal sources in 2019. Furthermore, Binance accounts for 27.5% of such funds whereas Huobi marked with 24.7% according to recent findings. This being said, over 300,000 individual accounts at both exchanges received Bitcoin from what ‘Chainalysis noted’ ‘criminal sources in last year.
“While exchanges have always been a popular off-ramp for illicit cryptocurrency, they’ve taken in a steadily growing share since the beginning of 2019. Over the course of the entire year, we traced $2.8 billion in Bitcoin that moved from criminal entities to exchanges,”
A small group of accounts with the large Bitcoin holdings reportedly received from criminals likely belong to ‘over-the-counter (OTC) brokers’ that are “typically associated with an exchange but operate independently.” This being said, KYC requirements for OTC desks are lower in crypto exchanges which likely paved the way for brokers to treat it as the open money-laundering path. Interestingly, Binance chief compliance officer Samuel Lim followed up on this report and claimed that the exchange itself is committed “to cleaning up financial crime in crypto and improving the health of our industry”. He further elaborated that;
We will continue to improve on our proprietary KYC and AML technology, as well as the third-party tools and partners we work with, to further strengthen our compliance standards
In its finding, Chainalysis also stressed that there are 100 major OTC brokers that provide money laundering services and if calculated, these 100 brokers together equate to 1% of all Bitcoin activity in a given month.
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