A new report from analytics company Chainalysis has shed light on a concerning trend in the world of cryptocurrencies. According to the report, traditional money launderers, who operate outside of the crypto space, may be using blockchain networks to move their illicit funds. This is a significant development, as it suggests that the problem of money laundering is not limited to the crypto world, but is instead a broader issue that affects both traditional and digital financial systems.
The report, which was released on Thursday, found that a large number of transactions valued just below the $10,000 mark were being sent to exchanges in 2024. While these transactions may not be definitively illicit, they do share characteristics with transactions that would raise eyebrows in traditional banking. For example, some of these transactions were split into smaller amounts just below the know-your-customer reporting thresholds, only to be recombined later.
Chainalysis’ Head of Research, Kim Grauer, noted that these transactions are not coming from the usual sources of illicit activity, such as crypto scams, thefts, and ransomware attacks. Instead, they appear to be coming from wallets that are not known to be illicit. However, the company’s software and labeling systems are designed to help crypto exchanges and other entities avoid accepting funds from criminal activity, and to assist government investigators in tracking down suspects.
The report also found that a significant number of transactions were flowing to over-the-counter brokers who advertise their willingness to turn criminal crypto into dollars, no questions asked. This is a major red flag, as it suggests that these brokers are actively facilitating money laundering activity.
Grauer emphasized that the report is not meant to imply that all of these transactions are definitively illicit. However, she noted that the characteristics of these transactions are similar to those that would raise suspicions in traditional banking, and that they warrant further investigation.
The report’s findings have significant implications for the crypto industry, as they suggest that the problem of money laundering is not limited to the crypto world, but is instead a broader issue that affects both traditional and digital financial systems. As such, it is essential that the industry takes steps to address this issue, including developing more effective compliance techniques and working with regulators to ensure that the crypto space is not being used to facilitate illegal activity.
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Source: Coindesk
