Analysts have learned of cryptocurrency laundering schemes through online gambling sites

Analysts have learned of cryptocurrency laundering schemes through online gambling sites

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Author: Liam Miller
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Analysts have learned of cryptocurrency laundering schemes through online gambling sites

Bitrace analysts have reported on schemes to launder criminally obtained cryptocurrency through online gambling sites


 

More than $7 billion in stablecoins has flowed from online gambling sites to crypto exchanges in the past year, some of it linked to illegal activity

Bitrace, a blockchain analytics company, has released a report in which it claims evidence of widespread use of the leading Tether USD (USDT) stablecoin in online gambling. The report highlights the risks associated with the use of stablecoins in gambling, including potential legal issues for users and platforms in countries where online gambling is banned.

Bitrace's investigation revealed that online gambling channels are being used by criminal syndicates to launder stolen or fraudulently obtained cryptocurrencies. Cryptocurrency payment processing services that provide settlement to online gaming platforms lack proper transaction authentication (KYT) and anti-money laundering (AML) mechanisms, allowing illicit funds to flow almost freely onto such platforms.

Bitrace traced the sources of funds flowing into one such service and found that a significant portion of them came from addresses associated with online fraud and phishing sites. Of the 20 other addresses selected for analysis, more than 40% of the payment services' total revenue came from cryptocurrency funds linked to money laundering and illegal activities.

The Bitrace report also reveals a growing trend of users of gambling platforms cashing out via cryptocurrency exchanges. More than $7.6 billion USDT related to online gambling was transferred to crypto exchanges' hot wallets over the past year, with the majority of transfers going to the addresses of small and medium-sized exchanges.

In June, French prosecutors said the local unit of the Binance exchange was under investigation for "illegal" cryptocurrency services and "aggravated money laundering activities."

 

 

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