Study: in 2019, criminals laundered $ 2.8 billion in bitcoins through exchanges

The research company Chainalysis analyzed methods of laundering funds obtained illegally through cryptocurrency exchanges. According to the report, Binance and Huobi sites are the most popular among criminals.

Analysts noted that over the course of the year, exchanges became more and more in demand among criminals for money laundering.

Analysts noted that over the course of the year, exchanges became more and more in demand among criminals for money laundering.

According to experts, more than 300 thousand accounts on these exchanges turned out to be connected with criminal activity. At the same time, 75% of the funds totaling $ 819 million received a total of 810 wallets.

Chainalysis believes that most of these addresses belong to over-the-counter (OTC) brokers. Simplified requirements for passing KYC procedures allow them to help criminals launder funds on exchanges, analysts said.

“First, they exchange bitcoin and other cryptocurrencies for Tether as a stablecoin intermediary, before allegedly withdrawing funds to fiat,” the study said.

Such brokers also often make large transfers to each other in attempts to "trick" the software that analyzes blockchains.

Analysts have compiled a list of Rogue 100 of the hundred largest over-the-counter brokers who, according to experts, provide money laundering services. 70 out of 100 work with the Huobi exchange. In total, during 2019, these 70 brokers received $ 194 million in bitcoins from criminal structures.

“It is interesting that not one broker from this list works for Binance, although it is possible that some of them also have accounts there or on other exchanges,” the analysts emphasized.

In response to the study, Binance announced that they intend to improve KYC and AML procedures to reduce the risks of money laundering through its platform.

At the same time, Chainalysis noted that not all over-the-counter brokers working with criminals were included in the list and many have yet to be identified, and their activity in the market is growing every year.

“The people on the Rogue 100 list are extremely active traders who have a huge impact on the cryptocurrency ecosystem. They have been receiving steadily growing volumes of cryptocurrency every month since the end of 2017, but their activity has increased sharply this year. During 2019, they received bitcoins worth more than $ 3 billion, many of them played a big role in fraud with PlusToken, ”the study said.

In general, funds that go through a hundred brokers from the list can make up to 1% of all activity in the bitcoin network in certain months, according to Chainalysis.

Recall that last year, Bitaline and Bittrex exchanges introduced software for tracking suspicious transactions from Chainalysis.