What cryptocurrency exchanges are most often used by scammers?

Sale of banned substances, the financing of various types of crime and other illegal actions, many associated with the Bitcoin. Cryptocurrency is actually used for such action, and in a fairly large scale. Analysts Chainalysis published on the eve of the results of the study the flow of illegal bitcoins.

The amount of transactions in BTC, which are related to criminal activity, in 2019 exceeded 2.8 billion dollars. More than 52 percent of the money had only gone through two cryptocurrency exchanges — Huobi and Binance.

How criminals use bitcoin

Binance and Huobi are one of the largest cryptocurrency exchanges. They enjoy a high reputation with customers and working every day with huge trading volumes. As it turned out, in 2019, the criminals passed through the Binance and Huobi 27.5 and 24.7 percent of the money turnover, respectively. That is, in the last year, almost every fourth dollar fell on the exchange out of the hands of criminals.

The share of the illicit bitcoins on the exchanges. Source: Cointelegraph

The money passed through more than 300 thousand accounts of criminals on the trading floors. However, only 810 of them — that is 0.27 percent of the total — received 75 percent of all illegal money for 2019.

Read my article on the topic: My experience of trading. What cryptocurrency exchanges need to choose?

Experts Chainanalysis came to the conclusion that the matter involved in the OTC brokers that have provided their services to criminal elements. Recall, OTC brokers are transactions directly between two parties without the involvement of any intermediaries. Perhaps some of them forwarded the funds through the exchange, to confuse the trail. We examined the topic of OTC-transactions in a separate article.

Here is a quote company representatives.

However, the problem is that although most of the OTC brokers are legitimate businesses, some of them spetsializiruyutsya on providing services to criminals for money laundering. The OTC brokers are usually much lower KYC requirements than the exchanges on which they work. Many of them use this little thing and help criminals to launder and cash out. Usually before withdrawal all the money it occurs by transfer of bitcoins and other cryptocurrencies in the Tether.

Main specialist for compliance Binance Samuel lim said that the exchange aims to combat financial crimes. According to him, Binance comply with the rules and KYC requirements of each jurisdiction in which they operate. He also added that the exchange will continue to develop their own techniques for combating money-laundering and other illegal activities carried out using cryptocurrency. Here’s his statement.

We will continue to improve our own procedures KYC and AML, as well as third-party tools to further improve our standards.

Scamer. Source: 2Биткоина


Hackers and scammers do use cryptocurrency, as well as make them. For example, at the end of November 2019 unknown robbed the South Korean stock exchange Upbit. Then she lost ETH 342 million , or 51 million dollars. Traces are still missing and unlikely to ever be.

The hackers went underground, and are actively trying to get their money. To do this, they transfer coins between wallets of all kinds to all even more confusing. The last time money was sent three days ago. We are talking about the transfer of 5 thousand ethers, or the equivalent of 713 thousand dollars. To stop this, no one can, because the network of cryptocurrencies are decentralized: the participants are equal, and transactions occur without someone’s approval.

Transactions by a hacker who hacked into the stock exchange Upbit. Source: Etherscan

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