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.
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.