[2020-01-16] Chainalysis traced $2.8 billion crime bitcoin sent to Binance Huobi

[bbc.reporter]

I thought that this might be good job on investigative journalism and a confirmation of the theory that exchanges are part of a global money laundering ring. However, again, when I read where this report was based from, the skeptical me thought that this was only another paid for advertisment from the corrupt world of bitcoin news media as usual.

https://blog.chainalysis.com/reports/money-laundering-cryptocurrency-2019



Blockchain analytics firm Chainalysis said Wednesday that it traced $2.8 billion in Bitcoin being sent by criminals to crypto exchanges in 2019, with the bulk of those transactions going to Binance and Huobi.

"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. Over the course of the entire year, we traced $2.8 billion in Bitcoin that moved from criminal entities to exchanges," Chainalysis noted, with 27.5% of that amount going to Binance and 24.7% going to Huobi.

On the two exchanges, a small group of accounts that received more than $100 billion worth of BTC in 2019 took in most of the illicit funds, Chainalysis found. 75% of the total amount received on Huobi and Binance went to 810 of the highest-receiving accounts.

"Overall, just over 300,000 individual accounts at Binance and Huobi received Bitcoin from criminal sources in 2019," Chainalysis noted.

According to the analytics firm, these large accounts likely belong to over-the-counter (OTC) brokers that "are typically associated with an exchange but operate independently."

Although Huobi and Binance both have Know-Your-Customer (KYC) procedures in place, such requirements are lower for OTC desks, hence the existence on the two exchanges of some OTC desks that specialize in providing money-laundering service to criminals, Chainalysis claimed.

Read in full https://www.theblockcrypto.com/linked/53138/chainalysis-traced-2-8-billion-in-bitcoin-being-sent-to-crypto-exchanges-by-criminals-last-year

[CryptoBry]

I am for fighting crimes in whatever form and type and certainly the cryptocurrency industry will never achieve its full potential if we are allowing criminals to have their cakes and eat them too. However, as of now, I am now aware of any mechanism put up to fight cryptocurrency related crimes that uses legitimate cryptocurrency exchanges. Maybe there must be that body that will be alerting these exchanges maybe to freeze the digital assets once they reached their respective platforms. We already have the technology that can trace the transactions but this information is nothing if no action can be take out of them. This can be a good ground why we must have a comprehensive strategy in fighting the many crimes using cryptocurrencies and that strategy should be heavily involving the very exchanges where these assets can be sold off and be converted to the fiat money.

[bbc.reporter]

@CryptoBry. You want to give exchanges your permission to freeze your accounts anytime someone else decides that you are a criminal? Yes it can be used against us.

Also, I am not on a level to say who is bad or good, however, taking crime use away from bitcoin will take away one of its important applications.

[squatter]

Blockchain analytics firm Chainalysis said Wednesday that it traced $2.8 billion in Bitcoin being sent by criminals to crypto exchanges in 2019, with the bulk of those transactions going to Binance and Huobi.

"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. Over the course of the entire year, we traced $2.8 billion in Bitcoin that moved from criminal entities to exchanges," Chainalysis noted, with 27.5% of that amount going to Binance and 24.7% going to Huobi.

Isn't Binance a client of Chainalysis? This is posted on Binance's website:

A big challenge in the cryptocurrency world is keeping illicitly gained money out of the system to maintain the integrity of the assets circulating in the system. This is the mission where Binance and Chainalysis are working hand in hand.

Throwing their client under the bus and making themselves look bad. Good work, Chainalysis.

[Slow death]

This should come as no surprise to anyone, it is normal. Even banks go through this kind of thing. What I can not understand is what is the purpose of this report? show that exchanges are money laundering targets? Why is this something already predictable and something that happens even to banks or want to show that the value involved in money laundering in the case of exchanges is very or little relative to banks? Anyway I am not surprised by this report

[dunfida]

Nothing new and non a surprising thing for exchangers to be tagged up with money laundering or any other illegal
transactions towards those coins being sent out on the platforms. Exchanges, mixers or even gambling sites are
always open to be used as a medium.

Throwing their client under the bus and making themselves look bad. Good work, Chainalysis.

Thats what you called excellent service. 

[hugeblack]

Money laundering is a broad term. Therefore, many reports do not explain exactly what their definition of money laundering is, is it tax evasion, dark activities, or lack of compliance with financial legislation.

[1Referee]

Money laundering is a broad term. Therefore, many reports do not explain exactly what their definition of money laundering is, is it tax evasion, dark activities, or lack of compliance with financial legislation.

It is a broad term, but that's something no regulator wants to explain in-depth. It's much easier to prosecute people like this because they do not know what they are being accused of exactly, but they do know that they are in deep troubles. I think that most people will not dig deeper themselves but just accept whatever they are subjected to. 

It shouldn't come as a surprise anymore that whenever there is something shady going on, Huobi's name always pops up very high on the list. Huobi and OKEx were also the exchanges where BSV pumped hard on most likely fake volume, all to create liquidity to sell into. No shortage of shady activity.

[Thekool1s]

@CryptoBry. You want to give exchanges your permission to freeze your accounts anytime someone else decides that you are a criminal? Yes it can be used against us.

Well, that's why we have courts! You can always use them if you believe your funds were locked away unfairly...  Plus make a good return over investment by suing the exchange iyam...

Also, I am not on a level to say who is bad or good, however, taking crime use away from bitcoin will take away one of its important applications.

You should read Satoshi's whitepaper again, It's supposed to be a currency and like all currencies, it is susceptible to Money Laundering. I don't know why people only see Money Laundering as the only "application" of Bitcoin. What about it being a medium to transfer wealth swiftly without having to pay extortionist fees in the process?

Money laundering is a broad term.

Exactly! The report doesn't even clarifies how it ^{( Chainalyisis )} identifies "illicit-activities", what are these? Ransomware funds, Black money? etc... Chainalyisis is mute on this...

In every jurisdiction that we operate in, Binance is compliant and adheres to local regulations and KYC requirements. We have built trust among regulators, financial institutions and the public through our developments and values, and we will continue to raise the bar in addressing AML compliance to the highest standard and across the largest asset coverage.

So basically what Binance is saying that the "local jurisdiction / Regulations" allow people to launder money if they are smart enough? Is this what it indirectly means? LOL...

[Harlot]

Did they just quoted themselves on their own news article? I know this came from their website but with how sloppy they are making the report it makes them look like unworthy of making them as a reliable source. If indeed these tainted coins are being transported in and out of Huobi and Binance I think that big of an amount and how the authorities can now catch up with them will show us if what they are saying is really true. Both exchanges are always in a crackdown or under the givernment's microscope so I wouldn't think that if they are laundering money it will be that high.

[buwaytress]

Yes, they quoted themselves. And yes, they've definitely gone in over their own heads in the past, according to this whistleblower who said about mixers (which you might say exchanges partially do):
"Things like that destroy the need for our/their software. It can make the software completely irrelevant.”

They're shameless, but then, when they've got big contracts with big states, hey, you gotta be shameless.

[Harlot]

Yes, they quoted themselves. And yes, they've definitely gone in over their own heads in the past, according to this whistleblower who said about mixers (which you might say exchanges partially do):
"Things like that destroy the need for our/their software. It can make the software completely irrelevant.”

They're shameless, but then, when they've got big contracts with big states, hey, you gotta be shameless.

I think that I'm getting your point. A forensic crypto tech company using other tactics to try and destroy mixers and exchanges because even their software cannot track what they are doing. It's like them admitting that their software is useless and what they will do next is have a black propaganda against these services who have proven to do more good rather than evil. The sad thing about this is since they are tied up to the government I can consider them as an untouchable and also a threat to these kinds of services, they can also feed false information to the government to have a favorable law for them.

[bbc.reporter]

@CryptoBry. You want to give exchanges your permission to freeze your accounts anytime someone else decides that you are a criminal? Yes it can be used against us.

Well, that's why we have courts! You can always use them if you believe your funds were locked away unfairly...  Plus make a good return over investment by suing the exchange iyam...

Also, I am not on a level to say who is bad or good, however, taking crime use away from bitcoin will take away one of its important applications.

You should read Satoshi's whitepaper again, It's supposed to be a currency and like all currencies, it is susceptible to Money Laundering. I don't why people only see Money Laundering as the only "application" of Bitcoin. What about it being a medium to transfer wealth swiftly without having to pay extortionist fees in the process?

The courts are there, however, that does not entirely help the user, it only gives us false security to enable them.

Also, I was only talking about bitcoin's application as a neutral form of currency. It should be used by everyone including criminals. It should bank the unbanked, however, it appears it has been better in unbanking the banked hehehehe.

[Thekool1s]

The courts are there, however, that does not entirely help the user, it only gives us false security to enable them.

Agree to disagree...

It should bank the unbanked, however, it appears it has been better in unbanking the banked hehehehe.

Well if you take into account the bigger picture, bitcoin's percentage comes out as pretty insignificant. According to the IMF, around $600 billion to $1.5 trillion of illicit money is laundered annually.^[1] Given these figures are accurate, Bitcoin's usage for illicit purposes turns out to be mere 0.46% and less in the bigger picture. The way I see it, it looks like the banks and local regulations are helping the banked become unbanked

Source:
[1] https://en.wikipedia.org/wiki/Offshore_bank , https://www.imf.org/external/pubs/ft/fandd/2018/12/imf-anti-money-laundering-and-economic-stability-straight.htm

[bbc.reporter]

@Thekool1s. Agreed, however, I was not talking about the bigger picture. I was only calling attention on how bitcoin might be tamed by the regulators instead of regulators tamed by bitcoin.

[Thekool1s]

@Thekool1s. Agreed, however, I was not talking about the bigger picture. I was only calling attention on how bitcoin might be tamed by the regulators instead of regulators tamed by bitcoin.

Fair enough... From the way I see it and what the Estimates suggest it looks like the regulators are already tamed by the unbanked  We have got nothing to worry about for now at least...

[bbc.reporter]

This is true if this community really wants to embrace bitcoin's application to bank the unbanked. Elon Musk did not consider how regulators are making up for lost time, however. Criminals might have moved from bitcoin to anonymous altcoins.


Tesla CEO Elon Musk is clarifying his thoughts on Bitcoin (BTC) and cryptocurrency. In a new interview on the Third Row Tesla Podcast, Musk says he’s neither an advocate nor a critic of the emerging technology.

“I’m neither here nor there on Bitcoin… I thought [the Bitcoin whitepaper] was pretty clever.”

Musk says crypto supporters should acknowledge a hot button issue – that digital assets are used for illicit as well as legitimate purposes.

Source https://dailyhodl.com/2020/01/23/tesla-ceo-elon-musk-blasts-the-one-thing-that-gets-crypto-people-angry/

[gentlemand]

that digital assets are used for illicit as well as legitimate purposes.[/i]

Well blow me down with a feather. Luckily Steven Mnuchin or whatever he's called said outright that the dollar is NEVER used for money laundering so it's got to go somewhere. It's very considerate of criminals to leave it alone. Nice guys.

[Thekool1s]

Musk says crypto supporters should acknowledge a hot button issue – that digital assets are used for illicit as well as legitimate purposes.

@gentlemand IKR! I can't believe Elon actually said this... How can he give such naive statements? Does he know 80% of cash carries traces of cocaine? Why aren't the FIAT supporters acknowledging that their dirty creation is being used for dirty illicit purposes?  Some times Elon makes me wonder whether he is Steve jobs or Steve Wozniak.

[bbc.reporter]

@Thekool1s. The fiat supporters do not care because they do not treat their currency similar to a religion. Elon Musk was correct by telling us that we should acknowledge cryptocoin technology for illegal purposes. I reckon that we should embrace it.

However, we might have lost our motivation for disruption and replaced it with want of legitimization and regulation because it might pump the price.