Blockchain analytics firm Chainalysis published a report on the 15th saying that it has traced $2.8 billion in Bitcoin being sent by criminals to crypto exchanges throughout 2019, with the bulk of the 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% to Huobi.
"Overall, just over 300,000 individual accounts at Binance and Huobi received Bitcoin from criminal sources in 2019," the report says.
According to the analytics firm, these large accounts are related to over-the-counter (OTC) brokers that "are typically associated with an exchange but operate independently."
Although both Huobi and Binance have Know-Your-Customer (KYC) procedures in place, such requirements are lower for OTC desks, so much so that there exist OTC desks which specialize in the provision of money-laundering services to criminals. Among a list of 100 suspected such OTC brokers, Chainanalysis points out 70 of them are operating on Huobi (and the 100 altogether could account for as much as one percent of all actual Bitcoin activity in a given month).
All this, of course, should come as neither as surprise nor shock. As the creation of Bitcoin itself may have been partially motivated by the necessity of such unregulated money vehicle for precisely such purposes, but also due to the fact that criminal and illicit activities and markets are actually such a major part of the global economy that neither could it be uprooted nor is there a desire to. Many perhaps already are well aware of HSBC and the surrounding scandals there, how they were revealed to be laundering money for Mexican drug cartels and other such criminals. Well, what may be less known is that HSBC itself was founded in Hong Kong during the opium wars and opium trade there with the purpose of banking them drug money at the time. And it's not surprising that this is what HSBC does to this day. And, to also cite the CIA themselves here:
"Once you set up a covert operation to supply arms and money, it's very difficult to separate it from the kind of people who are involved in other forms of trade, and especially drugs. There is a limited number of planes, pilots and landing strips. By developing a system for supply of the Contras, the US built a road for drug supply into the US."— Former CIA agent David MacMichael
Thing is, of course, there's a strong political component to all of this. The problem is not so much crime, as the keeping track of it and controlling it for one's (usually the state's) end goals and purposes.
It also wasn't that long ago when Shapeshift was revealed to have been commonly used in conjunction with Monero by criminals for money laundering purposes. The Internet/cyberspace is increasingly becoming a battleground domain and crypto-currencies appear to be playing an ever increasingly important role.
