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Criminals Laundered $2.5 Bln Worth Bitcoin, Mostly In Nations With Lax AML Laws


A new study has found that criminals have laundered $2.5 billion worth of Bitcoin, 97 percent of which is from unregulated cryptocurrency exchanges or in countries with lax Anti-Money-Laundering (AML) regulations.

Cryptocurrency research group CipherTrace conducted an analysis of 45 million transactions from the top 20 cryptocurrency exchanges in the world to measure the level of bitcoin payments for criminal activities.

CipherTrace Cryptocurrency Intelligence defined transactions from "criminal sources" as dark market site, extortion, malware, mixer/tumbler/money laundering site, ransomware, and terrorist financing.

The study found that cryptocurrency exchanges received 380,155 bitcoins directly from criminal sources between January 2009 and September 2018.

Crypto exchanges in countries where AML is either weak or not enforced receive 36 times more Bitcoin from sketchy individuals or groups.

The report says that in the first three quarters of 2018, $927 million of cryptocurrencies was stolen by hackers.

Criminals are flowing large amounts of dirty bitcoin into these poorly regulated exchanges to turn it into "clean" cryptocurrencies, and move funds into the global financial payments system with little risk of being detected.

According to CipherTrace, there are likely 50 percent more criminal crypto transactions than it traced for this report because "criminals are typically very clever and deft at hiding their tracks."

Opportunities to launder cryptocurrencies will be greatly reduced if cryptocurrency AML regulations are successfully enacted and enforced globally, in the opinion of the U.S.-based cyber security firm.

Referencing the US State Department data, CipherTrace determined that 79 countries have weak AML regimes.

The report warns of new cryptocurrency crime threats that continue to emerge, including highly targeted mass cyber extortion, SIM swapping, and advanced cyber attacks on exchange personnel.

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