Blockchain Week: Todd Lenfield of Chainalysis on Crypto Crime
The recent Chainalysis Crypto Crime reported noted there is 270 wallet addresses which are connected to 55% of all money laundering.
Mr Lenfield noted that 11% of those addresses are associated with Australian digital currency exchanges and while that could be a surprising number it shows the how important robust AML/CTF programs are in helping to track and shut down illicit use of digital currencies and needs to be put in context since:
0.34% of digital currency transactions are associated with illicit activities... we have seen a dramatic reduction this year.
He further commented that this amount is far less than the amount of known and suspected money laundering happening in the traditional financial sector and that from Chainalysis' view they would be happy to have criminals use crypto as it makes them far easier to find. He noted some examples of criminals being in Australia using digital currency, leaving significant digital evidence of their activities and leading to their arrest and prosecution.
Mr Lenfield explained that US, Russia, China and UK, Ukraine, South Korea, Vietnam are the main jurisdictions involved in illicit digital currency transactions, not Australia, and that darknet markets are focused in Russia for Russian speakers (mostly the Hydra darknet), China is best known for malware and a lot of scams are seen in the US, particularly involving gambling.
An example was given of Hamas publishing a Bitcoin address to solicit donations, and that this made it easy to track and trace donations and the US Department of Justice became involved to address that.
It's fantastic that Chainalysis has a full time country manager on the ground in Australia and we look forward to the pervasive myths of digital currencies being principally used for crime being challenged and corrected, and that figure of 0.34% being reduced further so digital assets can claim their deserved reputation as a far safer payment system than traditional financial networks.