Just 270 Addresses Responsible for Majority of Money Laundering in Crypto: Chainalysis

Just 270 Addresses Responsible for Majority of Money Laundering in Crypto: Chainalysis

The United States, Russia, and China receive the highest volume of digital currency from illicit addresses.

Just 270 deposit addresses are being used for the majority, 55% of all of the cryptocurrency value sent from illicit addresses in 2020, as per the latest research of Chainalysis. These addresses collectively received $1.3 billion worth of illicit crypto, while just 24 received over $500 million worth of it.

Additionally, 1,867 deposit addresses received 75% of all cryptocurrency value sent from illicit addresses in 2020. This level of concentration is greater than in 2019, showing that a small group of crypto services is being used by criminals to launder hundreds of millions of dollars.

Money laundering actually makes up a huge portion of the illicit funds that travel to service deposit addresses, as per the report. A smaller but significant portion of illicit funds also goes to deposit addresses that do a high volume of legitimate transactions and flies under the radar.

Cryptocurrency sent from illicit addresses facilitating money laundering tends to wind up at just a few services, mostly five including mainstream “risky” exchanges, mixers, gambling platforms, ever since 2017.

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The report also found that the United States, Russia, and China received the highest volume of digital currency from illicit addresses, reflecting their high shares of crypto trading volumes.

Scams followed by stolen funds make up the largest crime type in the US while Russia receives a “disproportionately large share” of darknet market funds, which according to Chainalysis, is because of Hydra. As for China, ransomware and stolen funds are the dominating crime types that the country receives funds from.

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Author: AnTy

Philippines’ Central Bank Issues New Guidelines to Curtail Money Laundering Among VASPs

Philippines’ Central Bank Issues New Guidelines to Curtail Money Laundering Among Virtual Asset Service Providers (VASPs)

Local Philippines news source, the Philippine Daily Enquirer, has reported this week that the country’s central bank now requires Crypto financial service firms to be fully licensed with the BSP.

This is according to a released document from the BSP, which was issued January 25th, that stipulated that VASPs will need to have a ‘certificate of authority’ to continue operating within the Philippines. In addition to this certification, VASPs would also need to remain in regulatory alignment with central banks, and their existing rules for financial service providers broadly, such as those rules regarding liquidity and operational risk, IT, consumer protections, and anti-money laundering.

Of course, the BSP’s announcement and regulatory requirements would be compulsory to VASPs with a minimum capital size of 50 million (Philippine) Pesos – or $1m – if they provide crypto custodial services, or 10 million pesos ($208k).

While this would place crypto companies in a bind of ensuring they are in complete regulatory alignment, the central bank’s governor stated that this was all in order to strike a balance between regulatory security and “an environment that encourages financial innovation while safeguarding the integrity and stability of the financial system.”

Along with ensuring regulatory adherence, the BSP has also stated that VASPs seeking to qualify as certified will need to undertake their customer due diligence. Additionally, these companies will need to treat crypto transactions in the same manner as cross-border transactions; meaning that participant data for transactions of 50,000 pesos ($1,000) or greater must be retained.

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Author: James Fox

FINMA’s New AML Provision Requires Crypto Exchange Transactions Over $1000 To Provide ID

On February 7, an anti-money laundering regulation provision was released by (FINMA) the Swiss Financial Market Supervisory Authority.

In order for additional risks to be reduced, the margin of crypto exchange’s remaining anonymous transactions, are now to be reduced from 5,000 CHF to 1,000 CHF, which is about $1,020. The new changes are the result of the passing of recent executions from the Financial Institution Act and Financial Services Act on January 1.

FINMA came out with the revised ordinance in order to respond to these new acts. Consultations on what’s should be done next will be held until the date of April 9.

Trying to Comply with FATF’s Directives

One of the most important changes in this Swiss provision is normalizing the national regulations in the country with the directives released in June 2019 by the Financial Action Task Force (FATF). FATF is the international regulator that has imposed the $1,000 maximum limit for anonymous crypto exchange transactions.

All this means that from now on, financial providers offering crypto services will have to gather information on any person or entity that initiates operations of over $1,000. The authorities need to regularly receive information reports with this type of activities.

Stricter Anti-Money Regulation at a Global Level

The FINMA initiative is only a small part of what happens in the anti-money laundering regulation sector at a global level. By implementing this new rule, the Swiss regulator is acknowledging that anti-money laundering (AML) risks have increased in the crypto space, a FINMA press release says.

Let’s not forget that the EU has implemented this year the 5th Anti Money Laundering Directive, also known as AMLD5. AMLD5 addresses certain types of crypto transactions and mentions clearly that information on crypto exchange customers needs to be reported to authorities.

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Author: Oana Ularu

Crypto Forensics Startup Elliptic to Urge Congress For Tougher AML Enforcement of Privacy Coins

Elliptic, a crypto analytic firm is set on recommending the US Congress demand tougher anti-money laundering (AML) rules for exchanges allowing of the trading of privacy coins. The firm is set to lay down recommendations at a US Congressional hearing that will discuss how cryptos are being utilized to facilitate human trafficking, CoinDesk reports.

On Wednesday the Human Rights Commission will attest as to how new technology has impacted the Trafficking Victims Protection Act to identify the new threats which should be addressed. One of the people who is set testify during the hearing is Elliptic head of policy Liat Shetret.

Tom Robinson Elliptic co-founder has revealed that the House Commission will look at how cryptocurrency is used on the dark web.

Shetret will produce to the House commission how the present tools can be used by the law enforcement agencies to keep track of the illicit cryptocurrency transactions. He also says that the US should be at the forefront in setting the pace for other countries in the creation of fresh regulations. He also stated that the FATF should be supported in its recommendations which can be used in the world.

A key recommendation that Shetret is set to give is that exchanges dealing with privacy coins have different set of tougher AML conditions.

According to Robinson past testimonies regarding human trafficking have been critical in the role played by cryptocurrencies leading to recommendations that Congress should have tougher rules in place to oversee the industry. He continued to explain that the current laws have been in place for the last twenty years and need updated, and what he intends to do is to show that the advent of analyzing blockchain transactions has led to a reduction of illegal utilization of the cryptos.

Shetret explained that while various types of crypto transactions are traceable, it is hard to trace privacy coins therefore it is important that the Congress and other regulators come up with new guidelines that will help exchanges as well as banks for dealing with privacy coins as well as people trading them.

Shetret also explained that the regulators should come with AML rules with lack of traceability in mind.

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Author: Joseph Kibe

EU’s Upcoming AML Regulation Forces Bitcoin Payments App Bottle Pay to Shut Down

  • EU’s 5th anti-money laundering directive coming into effect on 10th January 2020
  • To not force this onto the community, Bottle Pay will cease its operations
  • Users need to remove any payment page links and withdraw all funds by Dec. 31

Bitcoin payments platform Bottle Pay has decided with a “heavy heart” to shut down its services rather than become subject to the new 5th anti-money laundering directive, announced the firm.

Bottle Pay, a faster and simpler way to make your BTC payments has been seeing huge user growth over the last few months. But the company will cease operating from 31st Dec. 2019.

Protecting the Interests of Users

Being a UK-based custodian Bitcoin wall provider, the company is required to comply with the new 5th anti-money laundering directive as per EU regulation that is coming into effect on 10th January 2020.

This directive limits the anonymity related to virtual currencies and wallet providers. It will further enhance the powers of EU Financial Intelligence Units and provide them with access to broad information.

Because this would require the company to collect additional personal information that the company says would alter the “current user experience” radically and negatively, they are shutting down. They aren’t willing to force this onto the community.

“To maintain our integrity as service providers, and to protect the interests of our team, investors and users, we have taken the painful decision to shut Bottle Pay down completely rather than become subject to these new regulations.”

What do you need to Do?

Now that Bottle Pay is shutting down, no new sign-ups and deposits will be accepted. The team has already taken off its bots on social media and funds that have been already sent using them will be returned to the sender within 7 days.

So, make sure you remove any payment page links that you have created from your social profiles. The company also advises uninstalling the Bottle Pay browser extension.

Withdrawal function will be taken offline and all the wallets will be closed on Dec. 31. Hence, you have to withdraw all funds to another Lightning wallet before that. Any remaining funds in wallets will be donated to the Human Rights Foundation.

For now, the company has no plans to open the company at a future date.

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Author: AnTy

Ukrainian Government Finalizes Money Laundering Laws Based on the FATF Recommendations

The Ukranian government has finalized a money laundering law for virtual assets and virtual asset service providers based on the recommendations put forward by FATF. Ukrainian legislative body Rada published the final version of the law on December 6th.

As per the published version, digital assets are categorized as a store of wealth, and also noted its potential as a tool for illicit activities including money laundering, and other kinds of fraud.

Ukraine who recently got Binance on board to help it formulate crypto legislation. The leading crypto exchange by trading volume signed a memorandum of understanding with the Ministry of Digital Transformation of Ukraine in November. The partnership would see Binance helping Ukraine in blockchain implementation as well as help them create a new market for virtual assets.

The Final Version of the Law

The final version of the law surrounding the virtual assets contains various guidelines for the authorities and the service providers. The published version contains the guide for the government on how to monitor and regulate crypto trading in the country. One such guideline suggests that crypto traders making trades worth $1,300 or above are required to submit their public key to the government for monitoring purposes.

The guideline suggests if the trader makes a trade higher than $1,300, then the identity of the sender and receiver will be verified by the government. Another guideline suggests that virtual asset service providers dealing in assets above $1,600 need to inform authorities about the customers they are dealing with.

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Author: Hank Klinger

Phoenix Fund Investments Linked to The OneCoin Money Laundering Scheme, Stole $110 Million

OneCoin was recently charged with fraud and money laundering. The founder’s brother, Dr. Rija Ignatova, admitted guilt to the charges and also accused Phoenix Thoroughbreds of being funded using the money laundered through OneCoin. Ignatova claims that the racehorse investment company Phoenix received $110 million from the OneCoin scam.

Phoenix Thoroughbred’s founder Amer Abudlaziz, however, denied the allegations against his company, saying it was not funded using money stolen through the OneCoin scheme. Contrary to Abdulaziz’s claims, the federal government has reported that Phoenix Thoroughbred received $110 million through an unnamed account with an Irish bank from OneCoin back in 2017.

It was also confirmed that the said account was used by Mark Scott, a former advocate, to launder money for OneCoin. The lawyer was found guilty and convicted for fraud and money laundering last week and stands to serve 50 years in federal prison.

According to a statement report released recently, Phoenix Fund Investments has denied the allegations brought against it and the founder Mr. Abdulaziz during the criminal proceedings against OneCoin. The company is determined to defend itself in a court of law and prove it was not linked to the fraud scam in any manner. The fund claims that Abdulaziz and his company have always acted in accordance with the stipulates of the law and is ready to contest the allegations.

There have also been allegations that the company misrepresented itself by saying it is a regulated thoroughbred fund while it is actually not regulated according to Racing Post. It is also held that the firm has not been operating as an investment fund despite it claiming to be one.

Recently, Phoenix Fund Investments entered into voluntary liquidation. It is not clear yet whether the liquidation decision is due to the recent allegations of money laundering in connection to the OneCoin scheme or otherwise.

The British Horseracing Authority has issued a statement to the Irish authorities confirming that it is aware of the case and already working on it with the aid of relevant authorities.

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Author: Denis Miriti

Movie Piracy Investigation Leads New Zealand Police to Seize $4.2 Million in Cryptocurrency

  • Police state that Jaron David McIvor has been laundering money through his PayPal and bank accounts, thanks to his online streaming movie website.
  • McIvor’s attorney states that the client is denying these allegations.

Cryptocurrency has dealt with many different scams, but one recent issue arose in a separate arrest in New Zealand. The national police force reportedly seized a total of NZ$6.2 million and NZ$6.7 million in cryptocurrency. The seizure came as a result of a local man who is believed to have been involved in online movie piracy, performed in the United States.

Based on the police report, the New Zealand police restrained about NZ$6.7 million at 5:00am local time on November 23rd. There was another NZ$1.1 million in bank funds, based on the Criminal Proceeds Recovery Act, which were allegedly confiscated by Jaron David McIvor, a 31-year old software programmer.

An hour after this interaction, a press statement was released by authorities that claimed that the authorities had seized $6.2 million in cryptocurrency, plus $800,000 in bank funds over the summer, though they did not name the suspect. Another $472,000 in cryptocurrency and $377,000 in bank funds from in November from an associate.

A high court judge is part of the CPRA process, required to decide if the wealth and benefits accrued by an individual has been done through criminal activity. If the processes confirm this method, then the assets related to the alleged criminal activities can be frozen and confiscated.

For this case specifically, the local police believe that McIvor is participating in money laundering, since he helped to create an illegal movie-streaming website that has seen the inflow of millions of dollars. Detective Senior Sergeant Keith Kay stated that he and his team received a tip from the IRS, which had been tipped off by suspicious activity reports from PayPal. This path eventually led the tax officials with the Asset Recovery Unit in Waikato to McIvor, who was located in New Zealand.

Speaking to the New Zealand Herald, the police stated that McIvor’s streaming site had brought him about $2 million, which went into his bank accounts after processing through PayPal, Stripe, and international wire transfers. Kay added:

“Introducing illicitly-obtained funds into New Zealand constitutes money laundering and police will thoroughly investigate and restrain the assets of those who undertake such activity […] regardless of where in the world the crime is committed.”

The lawyer handling McIvor’s case, Truc Tran, stated that his client is presently denying allegations against him for money laundering, but no other details have been released.

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Author: Krystle M

Silk Road Merchant Admits Guilt in Money Laundering Charges Worth $19 Million With Bitcoin

Hugh Brian Haney, a former narcotics dealer, has pled guilty to charges of laundering over $19 million USD of his profits that were raised illegally using Silk Road, a prominent dark web market. Now, according to the prosecutors of the Southern District of New York, a plea deal was struck and Haney will go to jail. The sentencing will not happen until early 2020, though.

This criminal was known to be one of the most high-ranking members of a narcotics group known as Pharmville. He was able to get around 4,000 Bitcoin from his Silk Road account before it was shut down. The man is being accused of trafficking drugs such as oxycontin, fentanyl, and others.

U. S. Attorney Geoffrey S. Berman has affirmed that Haney has used the online black market to sell drugs to people all over the globe and that the drug dealer was able to get a profit of more than $19 million USD using it.

He was caught when he was trying to liquidate his Bitcoin and turn it into cash so he could spend it without being traced. This happened in February 2018 and his accounts have been frozen since then. He originally claimed that he mined all the BTC, but was unable to prove it.

The Silk Road was known for being very popular during the end of the last decade and the beginning of this one. Ross Ulbricht, its creator, was condemned after the site was shut down and he is currently is serving a life sentence for his involvement with the network.

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Author: Gabriel Machado

FinCEN Director Asks Casinos To Follow The Agency’s Guidelines For Suspicious Crypto Activities

At an Anti-Money Laundering Conference in Las Vegas, the director of the Financial Crimes Enforcement Network (FinCEN) asked the casinos to comply with the agency’s guidelines in regards to suspicious convertible virtual currency (CVC) activity.

Convertible virtual currency is an unregulated digital currency that can be used as a substitute for real and legally recognized currency. It usually has measurable value in real money, but what makes it convertible lies in its ability to be interchangeable.

In his speech, he mentioned that the two areas where CVC and Casins intersect are mostly online casinos. Even physical casinos and card clubs are increasingly becoming more vulnerable. He reminded about the gap in reporting about the suspicious activities in these areas, saying:

“I encourage casinos to closely review both documents on FinCEN’s website to see how we are addressing this industry and its interactions with others in the financial sector. Casinos should be filing SARs when they encounter suspicious CVC activity and any cyber events that affect, facilitate, or conduct transactions. We know that casinos are targets for cyber and cyber-enabled criminal activity such as ransomware attacks and business e-mail compromise schemes.”

FinCEN was founded in 1990 with the goal of fighting money-related crime. The agency analyzes financial transaction information with the goal of combating terrorism financing, money laundering, and other financial crimes. Blanco has held the position since November 2017. In May 2019, the firm issued new guidance that contains its financial regulation policies concerning Decentralized Applications.

Last year BitcoinExchangeGuide had reported about Blanco explaining the agency’s stance on crypto. He was overall positive about cryptocurrencies and blockchain technology. He began his speech discussing how crypto can be used to optimize businesses and conduct more efficient international transactions. Although, even then, Blanco had claimed crypto can be used for criminal activities and that his agency’s goal was to facilitate a healthy, crime-free cryptocurrency ecosystem.

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Author: Sritanshu Sinha