CipherTrace,
a leading cryptocurrency intelligence firm, today released its Q1
2019 Cryptocurrency Anti-Money Laundering Report. The report details
major crypto thefts, scams and fraud over the past quarter, chronicles
active and pending regulatory legislation and explains new trends in
crypto crime.
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In particular, this report highlights a concerning trend of cross-border
crypto payments leaving U.S. exchanges and entering offshore and
untraceable wallets. In the twelve months ending March 2019, crypto
transfers from U.S. exchanges to offshore exchanges grew 21 points or 46
percent compared to the same period two years ago. Once these payments
reach exchanges and wallets in other parts of the globe, they fall off
the radar of U.S. authorities. This highlights a major regulatory blind
spot for the U.S.
The report also touches on the recent Bitfinex/Tether controversy in
which the New York Attorney General’s Office revealed what they allege
is a fraud involving the loss of $850 million. Although the
story is still developing, CipherTrace notes that the source of the
loss was a Panamanian payment processor, Crypto Capital, which
QuadrigaCX also used extensively.
Further documented in the report are details of countries like Iran
leveraging cryptocurrency to circumvent global monetary sanctions. In
November 2018, SWIFT, the Society for Worldwide Interbank Financial
Telecommunication, www.swift.com,
a global interbank funds transfer network used by most of the world’s
banks to perform cross-border payments, banned some Iranian banks from
access to its widely used cross-border payment services. Consequently,
this January, Iran launched its own sovereign cryptocurrency in what
appears to be a clever sanction sidestep.
Exchange thefts and exit scams totaled more than $356 million in Q1
2019. All of that money will need to be washed, and if the trend
continues, we could see a near-billion-dollar money laundering problem.
New and innovative money laundering techniques have kept regulators on
their toes. Now, a new wave of privacy coins threatens to further
exacerbate the issue. In preparation for a potential crypto resurgence,
regulators around the world are quickly deploying regulatory guidelines,
adopting blockchain forensic programs and demanding AML and CTF
compliance.
“Although this report punctuates some of the negative occurrences within
the crypto ecosystem, it is important to view these illuminations as
markers for improvement,” said Dave Jevans, CipherTrace CEO. “This is
the wake-up call crypto needs. Cryptocurrency is maturing, and that
means having a few growing pains. Once we identify problems, we can find
solutions. Crypto currency projects must grow up before they can move
forward.”
For access to the full
report, visit: https://ciphertrace.com/articles/q1-2019-cryptocurrency-anti-money-laundering-report/
About CipherTrace
CipherTrace develops cryptocurrency
anti-money laundering, cryptocurrency forensics, blockchain threat
intelligence and regulatory monitoring solutions. Leading exchanges,
banks, investigators, regulators and digital asset businesses use
CipherTrace to trace transaction flows and comply with regulatory
anti-money laundering requirements, fostering trust in the
cryptocurrency economy. Its quarterly CipherTrace Cryptocurrency
Anti-Money Laundering Report has become an authoritative industry data
source.
CipherTrace was founded in 2015 by experienced Silicon Valley
entrepreneurs with deep expertise in cybersecurity, eCrime, payments,
banking, encryption, and virtual currencies. The U.S. Department of
Homeland Security (DHS) Science and Technology (S&T) and DARPA initially
funded CipherTrace, and it is backed by leading Silicon Valley venture
capital investors. For more information, visit: www.ciphertrace.com
and follow them on Twitter
and LinkedIn.
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