Banks Ignore up to 90% of Suspicious Crypto Transactions

Kataryna Habeliia September 10, 2020


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Financial institutions do not understand the nature of cryptocurrency transactions, so they can miss up to 90% of suspicious crypto transactions.

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This is the conclusion reached by analysts at CipherTrace.

Over the past two years, banks have reported 134,500 suspicious crypto transactions involving convertible virtual currencies (CVCs). CipherTrace experts consider this figure to be underestimated. In their opinion, many banks do not understand how to track such transactions or turn a blind eye to them.

For identification, financial institutions use their own database of accounts of senders and recipients of transactions. CipherTrace claims that large streams bypass the system where data cannot be matched. In addition, the name of the legal entity of the exchange may differ from the brand.

“A typical name-based system can completely skip up to 70% of cryptocurrency exchanges and up to 90% of transaction volume,” — the report says.

Analysts have urged banks to use systems that would allow them to identify transactions from peer-to-peer cryptocurrency exchanges and smaller services. The solution can be the comparison of contact information with user data.

Let us remind you that cybercriminals have come up with a new method of money laundering through cryptocurrency. Read more here. The mechanism of “exclusive mining” allows you to bypass analytical systems and present the confirmation of the transaction through private channels as a reward from mining cryptocurrency.

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