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Chainalysis: we know which cryptocurrency exchanges launder dirty money
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Chainalysis: we know which cryptocurrency exchanges launder dirty money

created Michał Sielski3 February 2023

Many people believe that the cryptocurrency industry is suspicious, because digital tokens are used primarily by criminal organizations that want to launder money earned from trading in weapons, people, drugs or other illegal activities. Convincing that this is not true is difficult, because there are still companies that focus mainly on cooperation with criminals. According to the latest report, they are easy to track.

Let's start with that Cryptocurrency exchanges and their managers have little influence on whether they will be exploited by criminals. Just like banks, which do not always need to know where the funds invested in them come from, or knife manufacturers who focus on a meat cutting product, which is then used, for example, to kill people.

Only that the development of technology also increases the possibility of tracing the path that money has traveled - especially digital money. It is even simpler in the case of cryptocurrencies. Here we can trace the exact path of each "coin".

Crime Report Chainalysis: Five exchanges are laundering money

The report has just been released Crime Report Chainalysiswho checks it thoroughly. It shows conclusively that five cryptocurrency exchanges are involved in money laundering. Japanese yen, US dollars and euros are deposited there. According to estimates, as much as 68% of dirty money goes to five cryptocurrency exchanges.

What's more, the odds are that this money can be traced quite easily.

– I am shocked because some of the addresses we checked transfer e.g. USD 100 million each, coming from unquestionably suspicious sources  and they still work without any problems. It's strange all the more so because it's extremely transparent and easy to track. A simple blockchain analysis is enough – emphasizes Kim Grauer, director of the research group at Chainalysis.

The fight against crypto-crime is getting more and more effective

Fortunately, law enforcement agencies are having more and more success with illegal transactions on cryptocurrency exchanges. The US Treasury's Office of Foreign Assets Control (OFAC) periodically seizes suspicious accounts and imposes sanctions on participants in money laundering on cryptocurrency exchanges. Nevertheless, it is still a big problem in the industry.

Dirty money laundering mainly in Russia?

But who exactly is the bad guy? Chainalysis did not name the five suspected cryptocurrency exchanges. Analysts still admit that exchanges simply may not know that they are laundering money. Although it is more likely that they do not want to be interested in it, so as not to accidentally find out ...

In the previous report, however, the names of exchanges were already mentioned. It turns out that cryptocurrency exchanges from Russia focused primarily on earning dirty money. This has been reported to the Russian authorities, you can even say that the Kremlin got the heads of the creators of cryptocurrency exchanges and their clients on a platter. And what? And nothing.

Despite this, analysts still hope that the fight against criminals will be more and more effective.

– We have been working and are still working hard to show where there are loopholes in the system that allow money laundering. Despite this, they still occur, and we find more. It's a race between good and evil, but we're still successful in it – convinces Kim Grauer, director of the research group at Chainalysis.

The problem, however, is that the approach to this procedure is quite different depending on the country. In the civilized part of the world, cryptocurrencies are becoming part of the financial mainstream, and in Russia, for example, they still serve mainly oligarchs, who thanks to them can legalize their assets, often built on the blood of defenseless victims.

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About the Author
Michał Sielski
Professional journalist for over 20 years. He worked, among others, in Gazeta Wyborcza, recently associated with the largest regional portal - Trojmiasto.pl. He has been present on the financial market for 18 years, he started on the Warsaw Stock Exchange when the shares of PKN Orlen and TP SA were just being introduced to the market. Recently, his investment focus has been exclusively on the Forex market. Privately, he is a parachutist, a lover of Polish mountains and a Polish karate champion.