SAN FRANCISCO—A recent report by CipherTrace Labs has found individuals are operating illicit crypto-Money Service Businesses (MSBs) at eight out of 10 U.S. retail banks, whereas in Europe, around 50% of all retails banks face this problem.
But the problem may become worse, according to the report, which suggests these MSBs are using their corporate bank accounts as a conduit to accept cash payments in exchange for crypto and facilitate the illegal trade of fiat and crypto, AMB Crypto said.
According to the CipherTrace Labs report, “Criminals and terrorists choose this technique because direct deposits and large sums of money moving in and out of business bank accounts—as opposed to personal accounts—are less likely to trigger fraud alerts or suspicious activity reports (SARs) at financial institutions. ”
The lack of regulations, along with the absence of a robust infrastructure, ensures that anti-money laundering guidelines aren’t followed to the letter and lax Know Your Customer processes pose a significant threat too. The report also highlighted how the previous year saw a rapid increase in P2P marketplaces.
“The fact that such operations are enabled under legally compliant financial institutions poses a substantial threat to banks with regard to the AML regulations currently in place,” AMB Crypto said.