Anonymous Crypto Trading Facilitating Laundering Of Dirty Money

Anonymous Crypto Trading

Cryptocurrencies took the financial world by storm due to their novelty in facilitating transactions. They promised faster and cheaper transactions. In fact, the peer-to-peer property the underlying technology removed the burden of intermediaries. However, the most important aspect of the new currency was high levels of privacy. This is becoming problematic as anonymous crypto trading is reportedly facilitating laundering of dirty money.

Particularly, a recent report by the Wall Street Journal is pretty damning. The report is a result of an investigation that reveals a systematic means in which dirty money changes hands. According to the report, nearly $90 million of dirty money passed through cryptocurrency intermediaries. Particularly, the report calls out ShapeShift AG as the prime conduit.

Fears about anonymous crypto trading confirmed

Actually, since the dawn of the cryptocurrency age, regulators had misgivings about too much privacy in crypto transactions. In fact, this is one of the reasons there is lack of a clear regulatory framework for the nascent market.

The ShapeShift system seems to be giving a platform to criminals to conduct their business without notice of law enforcement. In part, the WSJ reports reads:

?A parade of suspected criminals has taken advantage of ShapeShift?s services since the exchange began in 2014, according to law-enforcement officials, independent researchers and the Journal?s investigation.?

Interestingly, most cryptocurrency exchanges claim to follow established guidelines when processing transactions. In addition, the exchanges claim that they keep track of their clients? identities while monitoring transactions. Allegedly, the steps aim towards combating money laundering. However, the WSJ investigation disproves this.

Damage already done

Further, independent researchers and even law enforcement personnel corroborate the WSJ investigation. As per the report, most of the money in Bitcoin went on ShapeShift. Here, the launderers converted the Bitcoin to Monera, and then the trail goes dark. This is due to the untraceable property of Monero.

Basically, as Cointelegraph points out, the laundering was possible due to anonymous crypto trading. According to the publication, it is possible to execute trades on ShapeShift even without having to log in. As a result, ShapeShift reportedly introduced ID requirements for traders. However, market observers note that the damage done will be difficult to get over.


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