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A recent analysis by Bitrace focusing on Tron addresses engaged in over-the-counter (OTC) transactions reveals that over the last 24 months, more than 3.439 billion USDT, classified as ‘at risk,’ has been transferred to these addresses.
This amount does not include addresses associated with centralized trading platforms, compliant cryptocurrency acceptance services, or significant money laundering entities.
Risky Funds Flood OTC Addresses
Recent insights from Bitrace’s examination of Tron addresses involved in Over-The-Counter (OTC) activities indicate that in the past 24 months, a concerning 34.39 billion USDT categorized as at risk has been moved to these wallets.
The report further disclosed that over half of the inflows into USDT consist of medium- to high-risk funds. Specifically, 14.7% of these USDT are linked to online gambling, 20.1% to gray and black market goods, and 19.4% are associated with money laundering.
The accumulation of USDT from these addresses may heighten the contamination risk of the related wallets and increase their vulnerability to risk management protocols imposed by centralized platforms. Additionally, investors connected to these addresses could face potential scrutiny from law enforcement agencies.
Anonymity remains a vital component of the cryptocurrency sector as users increasingly adopt privacy-enhancing technologies. However, it is essential to recognize that this trend also brings about elevated risks. Bitrace’s findings indicate that OTC trading markets characterized by greater anonymity tend to draw a larger share of risky crypto funds.
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Bitrace references a situation where cryptocurrencies were utilized for online gambling, leading to illicit funds being funneled onto a trading platform, which ultimately resulted in money laundering allegations. The OTC address “TGTKDo” has been operational since September 2022, with a total transaction volume surpassing 28.8234 million USDT.
This address has initiated multiple transfers related to money laundering and online gambling, potentially jeopardizing the platform accounts receiving these funds by putting them at risk of being controlled or frozen.
JPEX Thunderstorm Incident Unfolds
The cryptocurrency sector continues to encounter significant challenges, highlighted by the ongoing “JPEX thunderstorm incident.” In this situation, several local operators of “over-the-counter exchange shops” in Hong Kong have been apprehended for assisting victims in depositing funds into JPEX.
Bitrace’s previous audit of JPEX hot wallet addresses uncovered that 22.04% of the funds are at risk. As a result, the operators of these acceptance companies may be subject to future anti-money laundering investigations.
Bitrace recommends that regular cryptocurrency investors remain vigilant when selecting a compliant and licensed platform for executing over-the-counter cryptocurrency transactions to avoid the contamination of their address funds. Neglecting these risks could lead to serious repercussions for investors and the wider cryptocurrency ecosystem.
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