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Peckshield's Annual Digital Money Laundering Report: Where Will Digital Money Go in 2020

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Flowing out of the country totaled $17.5 billion, up 51 percent from 2019 and still growing rapidly.

Peckshield Releases 2020 Annual Report on Anti-Money Laundering in Digital Currency

Original source: Peckshield

Send shield & have spent PeckShield Release & have spent 2020 Annual Digital Currency Anti-Money Laundering Report. According to the report:

The number of unregulated departures will be as high as 2020. 175 $100 million, versus $NBSP; 2019 Annual growth & have spent 51% and growing fast. Although the major countries gradually landed on the supervision of virtual currency, launched a series of regulations for virtual currency, butDue to the borderless nature and anonymity of virtual currency, it increases the threshold for governments to regulate and intervene.

Fraud cases involving virtual currency continue to occur frequently, and extortion cases are growing rapidly. The global anti-money laundering situation of virtual currency is grim. With the implementation of the "card freeze" action in China and the effective anti-money laundering law, traditional money laundering channels have been severely hit, and criminals have shifted to the field of virtual currency.Peckshield suggests that virtual currency trading platforms, over-the-counter traders, wallet software and other service providers should introduce anti-money laundering tools as soon as possible to actively avoid risk funds.

Peckshield found that in the second half of 2020, the anonymous, complex and transnational virtual currencies began to be used to commit crimes, including fraud, attack, extortion and gambling, as well as the gray industries such as money laundering and grading. In particular, terrorist organizations began to turn to the virtual currency field for financing to support their activities.Peckshield said the trend should be taken seriously by relevant parties, especially the public security authorities, national security agencies and financial regulators. Only when the regulatory tools and technical means of the new virtual currency are popularized can the black and ash production, money laundering and terrorist financing of the use of virtual currency be cracked down on and contained.

In 2020, the digital currency market will usher in a burst of growth. Under the influence of multiple factors, such as the spread of new crown disease, the US election and the collapse of crude oil price, the investment value of digital currency starts to highlight. In particular, in the second half of the year, traditional financial giants such as DBS Bank, Visa, Paypal, and the market fever led by financial innovation products such as DEFI once again stimulated the enthusiasm of participants.

Throughout the world, major countries are accelerating the layout of blockchain technology and central bank digital currency, and at the same time, regulation is also constantly strengthening and advancing.

Domestically, in April 2020, blockchain was officially included in the scope of China's "new infrastructure", ranking among the new infrastructure of information infrastructure. At the same time, China's central bank digital currency (DC/EP) pilot accelerated, no matter in the technical level or financial application field, all show the central bank's digital currency in the research and development, application, popularization of the world's overall ambition. Internationally, other mainstream countries have expressed positive attitudes towards central bank digital currencies, but they are still in the exploratory stage.

As the core technology of blockchain has been raised to the height of national strategy, the public has become more and more concerned about the blockchain field, and all kinds of scams have emerged, among which the "fund plate" and "pig plate" packaged with the concept of "blockchain" have emerged one after another. In view of the scams that rely on the concept of "blockchain", relevant law enforcement departments in China have tightened the supervision on virtual currency activities, launched investigation, traceback, frozen cards and other actions, and the initial results have been achieved.

However, due to the borderless nature of mainstream virtual currencies such as BTC, ETH and USDT, virtual currencies have not been included in the clear scope of government supervision. And even if one country's government intervenes, the virtual currency can still circulate in other countries, raising the bar for regulatory intervention.

The flow of unregulated virtual currency across borders

Send shield & have spent Peckshield's Virtual Currency Anti-Money Laundering Situational Awareness System Coinholmes combined with the existing address tags of 100 million to track and monitor a variety of high-risk addresses, including fund address, dark net address, gambling address and other addresses, and found that there are frequent interactions between these black address and trading platform address. CoinHolmes defines this kind of high-risk address assets, inflow and outflow trading platform behavior as "suspicious assets" inflow and outflow.

As the chart shows, outflows to foreign trading platforms totaled $17.5 billion in 2020. BTC, for example, was $11.4 billion in 2019 at current trading prices, and the total outflow over the past three years exceeded 1.5 percent of China's $3 trillion in foreign exchange reserves.

The largest number of Bitcoins were sent abroad in March (see chart), at 172,115.39; The value of bitcoin sent abroad in December was the highest for the year, at more than $2.5 billion.

It is worth noting that we use several large trading platforms as research samples to analyze the trend of the flow of "suspicious assets" on global trading platforms. Therefore, the obtained statistical data is a conservative estimate, and the actual fund flow momentum will be larger than our statistical data. Even so, we find that the amount of money flowing out of the trading platform every year is huge, in excess of billions of dollars.

Send shield & have spent The major trading platforms in the Peckshield sample included: Huobi, OKEx, Bitfinex, Gate. IO, ZB, Kucoin, Bibox, Binance Binance, Bitstamp, Bittrex, Kraken, Coincheck, Coinbase, Poloniex, BitFlyer, and Upbit.

The amount of money flowing through the dark web to major trading platforms

Research by Peckshield shows that Bitcoin is still the most dominant payment virtual currency used in illicit transactions on the dark web. Some of these Bitcoins are then transferred to exchange platforms to be laundered or converted into fiat and other virtual currencies.

The total number of Bitcoins flowing directly from the dark web into exchanges in 2020 was 213,431.6, worth $28.816 million at current trading prices (see chart).

Notably, only a small fraction of the Bitcoins in the dark web go directly to exchanges, but the amount that goes to exchanges via intermediate addresses is not counted.

At present, the total amount of direct transfer is nearly 30 million, indicating that the anti-money laundering situation of virtual currency is still serious, and the supervision needs to be strengthened urgently.