Money Laundering Less Than 1% of All Bitcoin Transactions – Report

Less than 1% of all Bitcoin transactions are involved in money laundering. This may also include trades done by bitcoin robots such as the Bitcoin System.

This is the conclusion of a joint report recently published by Ellicit, a Bitcoin forensics firm, and the analysis team of the Foundation for Defense of Democracies (FDD).

The report, written to help in analyzing the movement of funds as well as the danger of money laundering, reveals that money laundering is not actually the problem that some critics of digital currency usually cite.

According to the report, “the amount of observed Bitcoin laundering [is] small and darknet marketplaces such as Silk Road and, later, AlphaBay are [generally] the source of almost all of the illicit Bitcoins laundered through conversion services.”

The report also revealed that a huge percentage of illegal transactions involving Bitcoins were processed in Europe. The trade volume was even five times higher compared to illegal transactions in North America.

Authors recommend that the best approach in fighting illegal transactions involving Bitcoin is through more strict anti-money laundering measures. The paper suggests that the only approach to handle illicit transactions is for “financial authorities in all jurisdictions to increase enforcement of AML rules.”

The report states that the lack of well-established legislation to cover cryptocurrency exchanges results to those exchanges based in Europe to adopt stringent Anti-Money Laundering policies by discretion instead of by obligation.

The European Union has already started to take steps to resolve these issues. It has even updated its Anti-Money Laundering Directive of 2015 so that its policies will also cover digital currency exchanges as well as digital wallet services.

However, the report also concludes that even the updated measures still has loopholes that can allow considerable laundering in cryptocurrency exchanges.

The research authors also encouraged the US Congress to create a national commission that will prepare the country for digital currency and help in developing a national strategy to harness the power of blockchain technology.