A well-known blockchain analysis company, Chainalysis reports in its latest publication has publicized concerns about the laundering trends of Bitcoin for 2019 as we are reading in our bitcoin news today.
Illegal Bitcoin with the worth of $2.8 billion was traced by the company, deposited to cryptocurrency exchanges all around, in the duration of 2019. Binance and Huobi each got around one-quarter of the total sum, while various other exchanges received the rest as per the blog post.
Chainalysis reports that the exchanges should have caught the illegal Bitcoin through KYC instruments, that give the ability to recognize illegally taken Bitcoin and other cryptocurrencies that have been stained by criminal links. It could be surprising that important and skillful crypto exchanges fail to stop illegal activity, the company claims.
Chainalysis says that besides the illegal Bitcoin that was sent to 300,000 exchange accounts, the bigger part of the aforementioned sum was concentrated in a few huge accounts. This suggests that criminals getting their Bitcoin through third parties, that in turn deposit the Bitcoin on an exchange. Chainalysis thinks that OTC brokers are the said third parties. These brokers enable trade between two parties, buyers and sellers, providing a significant source of market liquidity.
The thing is that OTC brokers also relaxed KYC standards, which means that they could work with illegal Bitcoin, on accident or deliberately. Chainalysis is not naming the firms it suspects, however it had identified 100 “rouge” OTC brokers, that could be laundering Bitcoin.
32 of those OTC brokers are between the 810 accounts that received the most stained Bitcoin. 70 of those have their accounts on Huobi. And while none of those brokers have accounts on Binance, it could be the case that that exchange company has its own rotten apples.
The rouge 100, are very highly active. Chainalysis claims that the OTC brokers in question could be responsible for about 1% of Bitcoin trading activity every 30 days. It says that they are hugely intertwined in frauds, like the PlusToken sell-off of 2019. Chainalysis also claims that crypto exchanges must take strong anti-illegal funds stance with the hard inspection of OTC desks, as hard as they inspect criminals. With the blocking of the bigger part of illegal Bitcoin, cryptocurrency exchange companies will end any incentive for criminals to utilize Bitcoin.
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