Key Takeaways
- The Bank of Italy identifies peer-to-peer services without KYC as avenues for money laundering, labeling them 'crime-as-a-service.'
- They claim money launderers exploit the pseudonymity of blockchain technology, using techniques like mixers, tumblers, and chain-hopping to obscure transaction origins.
- The report also highlight risks associated with 'Satoshi Spritz' events and platforms like kycnot.me, which facilitate Bitcoin transactions without identity verification.
Bank of Italy Labels P2P Services as Criminal
The Bank of Italy has released a document that categorizes peer-to-peer (P2P) services allowing Bitcoin transactions without identity checks as 'crime-as-a-service.'
These services are highlighted as particularly attractive to money launderers due to their lack of Know Your Customer (KYC) procedures.
The report specifically mentions 'Satoshi Spritz' events where participants can trade Bitcoin for various goods or currencies without formal identification.
High-Risk Jurisdictions and Money Laundering
Money launderers focus on countries flagged as high-risk by the Financial Action Task Force (FATF) or those without robust anti-money laundering laws.
Cooperative jurisdictions that do not fully enforce regulations are also targeted for laundering activities.
The report claims that money launderers particularly target entities located in countries considered high-risk by FATF and/or lacking anti-money laundering legislation, as well as those authorized in cooperative jurisdictions that fail to fully implement regulations.
Techniques to Obscure Illicit Funds
The report says that a blockchain's transparency does not prevent it being used for money laundering as transactions maintain pseudonymity, not anonymity.
Advanced techniques include using mixers and tumblers to blend funds, making tracing more complicated.
Chain-hopping through different blockchains with smart contracts or bridges adds layers of complexity to tracking illicit funds.
Anonymous wallets provide additional security by masking IP addresses, further disrupting the traceability of transactions.
