How ‘dirty’ currency is tracked and why Monero no longer works
Cryptocurrency owners frequently experience dirty coins firsthand. What are they, and why are such assets becoming easier to track?
Anyone who doesn’t track so-called “dirty” cryptocurrencies can receive these marked assets in their wallet. Many large platforms have blocked such wallets, and proving innocence can sometimes be challenging.
Analytical systems specialists can change the data on cryptocurrency addresses to associate funds with illegal activity, even if a significant amount of time has passed since they were received.
Large centralized exchanges (CEX) are one of the most law-abiding players in the market. They typically comply with the recommendations of the Financial Action Task Force (FATF), an intergovernmental organization aimed at combating money laundering, terrorist financing, and other threats. They also use special analytical tools to check the purity of cryptocurrency at the entry stage, which makes it unlikely that “dirty” assets will be received on such platforms.
However, the risk arises if the exchange is subject to sanctions, from which all associated funds can be marked as sanctioned.
In contrast, decentralized services (DEX) can operate without licenses, in a gray area, and do not adhere to anti-money laundering (AML) requirements, which increases the likelihood of receiving “dirty” cryptocurrency.
so decentralized exchanges give freedom but the big centralized ones have more of the coins we can trust is not dirty? Is there going to be AI to monitor this so dirty coins are detected automatically
How can ‘dirty’ coins end up in a wallet?
Regulated trading platforms and exchangers closely monitor the circulation of cryptocurrencies associated with criminal activity. They record assets that have been involved in illegal transactions.
Fraudsters use various schemes to hide their actions and “clean” the coins, including crypto mixers, splitting transactions into small amounts, unregulated platforms, gambling, prepaid cards, and crypto ATMs.
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Thank goodness there's a way to Track these things better now. Crypto is getting too popular to leave these lose ends United. More people are believing in crypto and if it gets bigger dirty currency will too so it's a great thing