THELOGICALINDIAN - OTC brokers may be to blame
Chainalysis, a above blockchain assay firm, has appear a blog post apropos aftermost year’s Bitcoin bed-making trends.
The Role of Exchanges and OTC Brokers
The close traced $2.8 billion of adulterous Bitcoin that was deposited to exchanges over the advance of 2024. Binance and Huobi anniversary accustomed about one-quarter of that total, while different exchanges accustomed the rest.
Chainalysis suggests that exchanges should accept bent adulterous Bitcoin through KYC measures, which accommodate the adeptness to admit baseborn Bitcoin and bill that accept been attenuated by crime.
It may be hasty that baronial exchanges abort to stop actionable activity, the close writes. The abounding account is added complex, however.
Chainalysis addendum that although adulterous Bitcoin was beatific to 300,000 barter accounts, abundant of that Bitcoin was concentrated in several ample accounts. This suggests that abyss are cashing out Bitcoin via third parties, which in about-face drop the Bitcoin on an exchange.
Chainalysis believes that OTC brokers are those third parties. These brokers facilitate trades amid buyers and sellers, accouterment an important antecedent of bazaar liquidity.
Unfortunately, OTC brokers additionally accept airy KYC standards, acceptation that they may handle adulterous Bitcoin, either advisedly or accidentally.
The Rogue 100
Chainalysis isn’t allotment its suspects, but it has articular 100 “rogue” OTC brokers that may be bed-making Bitcoin.
32 of those brokers are amid the 810 accounts that accustomed the best attenuated Bitcoin. 70 of those brokers accept accounts on Huobi. And although none of those brokers accept accounts on Binance, that barter may accept its own bad actors.
The rogue 100 are additionally awful active. Chainalysis says that these OTC brokers may annual for as abundant as 1% of Bitcoin trading action every month. It adds that they are awful complex in scams such as aftermost year’s PlusToken sell-off.
These OTC brokers accept additionally developed rapidly back 2024, as apparent in the blueprint below:
Solving the Problem
Chainalysis suggests that crypto exchanges should booty a close attitude adjoin adulterous funds by analytical OTC desks as agonizingly as they analyze criminals.
If exchanges administer to block best adulterous Bitcoin, there would be little allurement for Bitcoin-related crime.
On the added hand, decentralization advocates altercate that exchanges accept no appropriate to baffle with the breeze of crypto. Stricter rules may do added abuse than acceptable if they anticipate accepted investors from circulating cryptocurrency as well.
Arguably, regulations already require ever austere policies—but the agitation will abide regardless.
