The head of development at Coinfirm is confident that the development of AML and KYC has made it difficult to use cryptocurrencies for illegal transactions and this has attracted new investors to the industry.
Durgham Mushtaha, business development manager at Coinfirm, an analytics company, said that unlike fiat currency, transactions with crypto assets are much easier to track using anti-money laundering (AML) tools.
He added that the introduction of “Know Your Customer” (KYC) procedures for identifying users on major crypto exchanges has led to the creation of a reliable financial system that is more protected from money laundering and other illegal activities than fiat currency. Mushtakha believes that these rules have strengthened the image of the sector.
“I see the next bull trend in the market as a turning point. Investors will dive into crypto en masse as fears dissipate and the sector grows exponentially,” he said.
Mushtakha noted that risk scenario indicators developed for the traditional financial system have been introduced to the crypto sector, including decentralized finance (DeFi).
“Where we differ from traditional finance is our online analytical processes. There are no blockchains in traditional finance, so they are missing a huge piece of the puzzle since the blockchain sector is not isolated,” he said.
AML is getting more and more sophisticated in the DeFi space, he says. Mushtakha stressed that year after year, reports confirm a decrease in the use of money laundering, and transactions using illegal addresses are only 0.15% of the 2021 figures.
He added that the US dollar is still the most used and preferred currency for money laundering, as opposed to cryptocurrencies.
“Now we can tell if your wallet was directly involved in illegal activities or inherited risk from another address that received funds dishonestly. For those involved in illegal activities, it would be wise to stay away from crypto assets and stick to the proven dollar,” said a Coinfirm top executive.
Recently, the New York State Department of Financial Services (NYDFS), in its first crypto industry investigation, accused Robinhood Crypto of violating anti-money laundering and user protection regulations.
