Thursday, July 5, 2018
The report also explains why cyber extortionists, dark markets and ransomware perpetrators prefer bitcoin for their cryptocurrency payments, CipherTrace stated, adding that "these dirty funds all need to be 'laundered,' which results in a multibillion-dollar and growing cryptocurrency money laundering problem that is attracting the attention of regulators globally."
The research report, also examines the state of the cryptocurrency anti-money laundering (AML) market and provides insights into the pending global cooperation and crackdown by the Group of Twenty (G20) financial crime-fighting Financial Action Task Force (FATF).
"The current rules, which seem strict on the surface, call for exchanges to: be registered or licensed, verify customers' identities, prevent money laundering, and report suspicious trading and transactions," Menlo Park, Calif.-based CipherTrace wrote in discussing its research. "Unfortunately, they are voluntary. But according to Reuters, the FATF is currently discussing making crypto exchange rules binding. Additional global enforcement action is also expected from US Financial Crimes Enforcement Network (FinCEN), and it will likely target money laundering services, crypto-to-crypto exchanges and privacy coins."
"Until now, the lack of regulatory guidance has hindered the broader adoption of cryptocurrencies," said Dave Jevans, CEO of CipherTrace. "Now we are seeing the big guys coming together asking for cryptocurrency anti-money laundering regulation—it is inevitable, it will be unified, and it will be global. There will be little room for privacy coins without AML or mixers in these Know Your Customer and Anti-Money Laundering regulated regimes. This will also be a wake-up call for virtual currency exchanges and financial institutions, exposing them to the risk of facing stiff penalties." Jevans is also co-chair of the Cryptocurrency Working Group at the APWG.org.
These developments are driving a significant and increased demand for crypto AML intelligence, according to CipherTrace. In response, CipherTrace launched the general availability of its new Cryptocurrency AML Compliance Solution, which is designed to help exchanges, hedge funds, ICOs, money transfer agents and banks safely participate in crypto asset markets while minimizing compliance efforts and costs. "This fast and powerful tool—which can handle massive numbers of transactions and value—traces the flow of funds through the crypto ecosystem to find the 'tainted money,'" the company stated.
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