In a recent fund analysis conducted by Bitrace on Tron addresses involved in over-the-counter (OTC) businesses, findings indicate that more than 3.439 billion USDT, categorized as ‘at risk,’ has flowed into these addresses over the past 24 months.
This figure excludes addresses linked to centralized trading platforms, compliant cryptocurrency acceptance platforms, and large money laundering institutions.
Risky Funds Flood OTC Addresses
Recent findings after Bitrace analyzed Tron addresses that conduct Over-The-Counter (OTC) operations reveal that over the past 24 months, an alarming 34.39 billion USDT at risk has been transferred to these wallets.
The report also revealed that over half of inflows into USDT are medium- to high-risk funds. Specifically, 14.7% of these USDT are associated with online gambling, 20.1% with gray and black market products, and 19.4% are linked to money laundering.
The implications of gathering USDT from these addresses could increase contamination of the related wallets and amplify their susceptibility to risk management measures enforced by centralized platforms. Furthermore, investors linked to these addresses may encounter potential scrutiny from law enforcement agencies.
Anonymity is a crucial aspect of the cryptocurrency industry as users increasingly embrace privacy-enhancing technologies. However, it’s important to note that this trend also introduces higher associated risks. Bitrace’s research demonstrates that OTC trading markets with higher levels of anonymity tend to attract a higher proportion of risky crypto funds.
Bitrace cites a case where cryptocurrencies were used for online gambling, and illicit funds found their way onto a trading platform, ultimately 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.
This address initiated numerous transfers related to money laundering and online gambling, potentially putting the platform accounts receiving these funds at risk of being controlled or frozen.
JPEX Thunderstorm Incident Unfolds
The cryptocurrency world faces ongoing challenges, as evidenced by the unfolding “JPEX thunderstorm incident.” In this case, several local “over-the-counter exchange shop” operators 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. Consequently, operators of these acceptance companies may face future anti-money laundering investigations.
Bitrace advises ordinary cryptocurrency investors to exercise caution when choosing a compliant and licensed platform for conducting over-the-counter cryptocurrency transactions to prevent the contamination of their address funds. Ignoring these risks may have severe consequences for investors and the broader cryptocurrency ecosystem.
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