Risky Funds Flow into OTC Addresses
A recent analysis conducted by Bitrace on Tron addresses involved in over-the-counter (OTC) businesses has revealed that over the past 24 months, more than 3.439 billion USDT categorized as ‘at risk’ has been transferred to these addresses. This excludes addresses linked to centralized trading platforms, compliant cryptocurrency acceptance platforms, and large money laundering institutions.
Implications of Risky Funds
The analysis further revealed that over half of the inflows into USDT are medium- to high-risk funds. A significant portion of these funds, 14.7%, is associated with online gambling, while 20.1% is linked to gray and black market products, and 19.4% is connected to money laundering.
Gathering USDT from these addresses could increase the contamination of related wallets and expose them to risk management measures enforced by centralized platforms. Investors associated with these addresses may also face potential scrutiny from law enforcement agencies.
Anonymity and Risks in Crypto
Anonymity plays a crucial role in the cryptocurrency industry as users seek privacy-enhancing technologies. However, this trend also brings higher associated risks. Bitrace’s research shows that OTC trading markets with higher levels of anonymity attract a greater proportion of risky crypto funds.
Bitrace cites a case where cryptocurrencies were used for online gambling, leading to money laundering allegations. The OTC address “TGTKDo” has been actively operating since September 2022, with a cumulative transaction volume exceeding 28.8234 million USDT.
JPEX Thunderstorm Incident
The cryptocurrency world faces ongoing challenges highlighted by the unfolding “JPEX thunderstorm incident.” Local operators of “over-the-counter exchange shops” in Hong Kong have been arrested for helping victims deposit funds into JPEX. Bitrace’s earlier audit results of JPEX hot wallet addresses revealed 22.04% of risk funds, potentially leading to future anti-money laundering investigations.
Exercise Caution
Bitrace advises ordinary cryptocurrency investors to exercise caution when choosing a compliant and licensed platform for conducting over-the-counter cryptocurrency transactions. Ignoring the risks associated with these platforms can have severe consequences for investors and the broader cryptocurrency ecosystem.
Hot Take: Risks in OTC Trading Markets
A recent analysis by Bitrace highlights the alarming flow of risky funds into over-the-counter (OTC) addresses. Over the past 24 months, more than 3.439 billion USDT categorized as ‘at risk’ has been transferred to these wallets, excluding those linked to centralized platforms and money laundering institutions. The study also reveals that OTC trading markets with higher levels of anonymity attract a higher proportion of risky crypto funds, posing potential risks for investors and platforms alike. It is essential for cryptocurrency users to exercise caution when engaging in OTC transactions and choose compliant and licensed platforms to mitigate these risks.
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