The recent cryptocurrency rally has revived fears by regulators that digital currencies facilitate money laundering.
A study showed criminals using a small network of digital currency brokers and providers to launder hundreds of millions from illegal activities.
Specifically, according to the study, last year through just 270 cryptocurrency addresses (the address corresponds to his digital wallet of use), many of which are linked to extra-system brokers, $1.3 billion of illegal digital currencies were traded. That’s about 55% of all illegal cryptocurrency flows detected by the US blockchain research and analysis firm Chainalysis.
The illicit use of cryptocurrencies has long been a source of concern for regulators around the world, with US Treasury Secretary Janet Gellen and European Central Bank President Christine Lagarde calling for stricter oversight last month.
Calls for stricter rules have risen in recent times as more and more big investors, especially in the United States, embrace bitcoin, which has led the world’s largest cryptocurrency to record an impressive rally since last March, scoring profits of 1,000%.
Bitcoin hit a record high, boosting a $1.5 billion investment announced by Elon Musk’s Tesla Inc. and today’s BNY Mellon vote of confidence; boosting estimates that cryptocurrencies tend to become a common asset.
However, digital currencies are subject to heterogeneous regulatory rules around the world, which helps them remain a popular means of trading for illegal activities.
However, Chainalysis figures show that the United States, Russia and China have the largest volume of digital currency transactions through illegal addresses.