Chainalysis Suggests $2.8 Billion in Bitcoin Was Laundered Last Year

For as much mainstream success and acceptance as Bitcoin and other cryptocurrencies have enjoyed in recent years, there are still those who remain skeptical of digital currency. In addition to those who criticize crypto for not having any “real value,” regulators have repeatedly pointed to the ability to “launder” funds as one of the reasons why Bitcoin needs greater oversight. To that point, a new report from Chainalysis found that $2.8 billion in Bitcoin was laundered just in the last year.

While the $2.8 billion figure is staggering overall, it’s even more alarming that half of this figure went through just two different platforms. More than one-quarter (27.5%) of these laundered funds were sent via Binance while another 24.7% passed through Huobi. Meanwhile all other platforms accounted for 47.8% of illicit Bitcoins being received.

In terms of user numbers, Chainalysis found that 300,000 accounts across Binance and Huobi received funds from “criminal sources” sometime in 2019. Of these, 31 accounts that received more than $100 million in funds (illicit or otherwise) during the year took in a total of $163 million in crime-linked Bitcoin.

To be fair, Chainalysis does make it clear that these transactions represent “just a small fraction of the total amount received by Binance and Huobi.” Moreover the firm included a statement from Binance that stated, “Binance is committed to cleaning up financial crime in crypto and improving the health of our industry. We will continue to improve on our proprietary KYC and AML technology, as well as the third-party tools and partners we work with, to further strengthen our compliance standards.” They added, “We have built trust among regulators, financial institutions and the public through our developments and values, and we will continue to raise the bar in addressing AML compliance to the highest standard and across the largest asset coverage.”

While it may be true that some criminals utilize Bitcoin and other cryptocurrencies to convert their illegal cash, as Chainalysis notes, it’s important to put these figures in context. Surely this report will be picked up by crypto critics and regulators but, if anything, it should simply give Binance and Huobi a “heads up,” allowing them to self-regulate — which it seems the former is already attempting. So although this might not be great news for Bitcoin, it’s likely just another growing pain that it will ultimately overcome.

Author

Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

Other Articles by Jonathan Dyer

Zilch Adds $50 Million to Latest Funding Round

Despite some reversals of fortune in FinTech as of late, a growing U.K.-based firm has announced an additional investment. Recently, Zilch announced that it had extended its round with an additional $50 million in funding. The added funds bring their Series C to a total of $160 million, while the company has now raised $460 million in equity and debt to date. The extended funding round comes on the heels...

Top 10 Personal Finance Articles of the Month — June 2022 

It’s time again for one of my favorite features here on Dyer News: a look at the top 10 personal finance articles of the month. To start, we'll take another look at financial independence and freedom. Then, with the housing market going a bit crazy lately, we'll feature a pair of articles on home buying. Lastly, we'll cover tips for one-income households, finance after death, fighting inflation, and more. As...

Bilt Rewards Launches Travel Portal with Benefits for Cardholders

Last year, the startup Bilt made a splash when it announced a new service that would reward users for paying their rent. That premise was then expanded upon with the launch of the Bilt Mastercard, which is issued by Wells Fargo. Now, continuing to capitalize on both the hype of their product and the demand for travel, Bilt has debuted another new offering for customers. This week, Bilt Rewards announced...