Chainalysis traced $2.8 billion in Bitcoin sent by criminal entities to crypto exchanges

While exchanges have always been a popular off-ramp for illicit cryptocurrency, they’ve taken in a steadily growing share since the beginning of 2019. Last year, the U.N. shared a similar view suggesting cryptocurrencies have become a popular choice by criminal organizations and sanction countries alike to bypass sanctions.

Now a Blockchain analytics firm Chainalysis said on Wednesday that Over the course of the entire year, $2.8 billion in Bitcoin was traced to be moved from criminal entities to exchanges.

Among all exchanges, Binance and Huobi collectively received a significant 50% in illicit Bitcoins, as per Chainalysis report.

• Over 300,000 individual accounts at Binance and Huobi received $1.4 billion worth Bitcoin from criminal sources in 2019.
• Of all suspected criminal accounts at Binance and Huobi, just 810 accounts received funds over $819 million in Bitcoin from criminal sources, representing 75% of the total ($1.4 Billion).

Chainalysis suspects many OTC brokers serve criminals:

It’s unclear how two of the largest exchanges who are subject to KYC regulations receiving so much Bitcoin from criminal sources. Chainalysis suspects many of these accounts to be of OTC brokers.

Most OTC brokers run a legitimate business, however, some of them specialize in providing money-laundering services to criminals. OTC brokers typically have much lower KYC requirements than the exchanges they operate on. Many of them take advantage of this to help criminals launder and cash out funds.

Binance Chief Compliance Officer Samuel Lim responded with the note:
“Binance is committed to cleaning up financial crime in crypto and improving the health of our industry. We will continue to improve on our proprietary KYC and AML technology, as well as the third-party tools and partners we work with, to further strengthen our compliance standards.“