OTC Trading Becomes Hotbed for Illicit Funds
According to recent reports from the Joint Chiefs of Global Tax Enforcement (J5), over-the-counter (OTC) cryptocurrency platforms are being exploited for money laundering and regulatory evasion.
These platforms offer high anonymity and seamless fund transfers, attracting significant illicit activity. J5 noted a more than 1000% surge in suspicious activity reports linked to crypto payment processors between 2020 and 2024.
- OTC platforms handle $1.44 billion daily
- Exchange trading volume is only around $74.5 million
- FinCEN has received reports on $236 billion in suspicious transactions
Money Laundering Risks Grow as Regulatory Pressure Intensifies
J5 warns that these platforms not only facilitate tax evasion but also provide fertile ground for money laundering. According to their data, reports of suspicious activities related to payment processors submitted to FinCEN have reached $5 billion.
Tax authorities from Australia, Canada, the Netherlands, the UK, and the US have called for enhanced regulation to curb illegal financial flows in the crypto space.