The 2024 Crypto Crime Report from Chainalysis deployed some new tactics like taking up the issue of the online trades of illegal content, especially children’s sexual abuse material (CSAM), as performed by users of the privacy-centric digital coins as the main theme. The study reveals an unsettling trend: those digital currencies around which are specially made to have cryptographic algorithms to protect the identities of the users are used in dark web transactions.

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• Chainalysis 2024 Crypto Crime Report highlights the increasing use of privacy-centric cryptocurrencies, like Monero, in online illegal trades, especially involving child sexual abuse material (CSAM).
• This bank integrates peer-to-peer credit without using conventional intermediaries based on the latest payment technologies, such as blockchain and cryptocurrency. In some cases, the AML supervision is insufficient to prevent the use of CBM payments by CSAV market operators to move funds since no KYC processes are used.
• Although it’s a fact that blockchain technologies have faced various challenges, its transparency characteristic which has helped law enforcement agencies in disrupting major CSAM operations has still demonstrated the potential of it being a tool against online crimes.

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The Chainalysis 2024 Crypto Crime Report Exposes the Dark Side of Privacy Coins in Facilitating Illicit Online Activities

Historically, Bitcoin has been the go-to currency for a myriad of illicit exchanges in the digital underworld. Yet, the Chainalysis report marks a significant and worrying shift towards Monero (XMR), a cryptocurrency engineered to obscure transaction trails, thus safeguarding user privacy. This feature is increasingly leveraged by CSAM vendors, particularly in the laundering phase following the sale of illegal materials.

Chainalysis additionally points out the rise of usage of instant currency exchange services on the part of CSAM traders. These platforms allow for a fast crypto-to-crypto conversion process as it is difficult to track these transactions, so the crypto assets could, for example, be converted from Bitcoin to Monero, concealing the origins and destinations of those criminal funds. When KYC processes are not adhered to this Facebook space only makes matters even worse since this can be used to conceal and cash on the abaxial money trail.

Even though identification and internal requirements for KYC with instant exchange systems and privacy coins, such as Monero, provide additional barriers to the financial sector’s efforts to counteract illicit dealings, regulators need to carry on their current course regarding cryptocurrencies. This problem has become glaring in the case of Binance, a recent news about the decision to delist Monero, under the pressure of regulations. It is a testimony of how big the issue comes out to be to cover the conditions of privacy coins which may be used either to conduct illegal activities or to protect users’ anonymity.

Although you won‘t always read a gray report, the document found a way to reflect the optimistic side of blockchain technology. He points out cases where law enforcement has successfully utilized a blockchain analysis to break up the large criminal networks that have dealt with the distribution of CSAM leading to arrests and rescues. By this we can see that blockchain technology is a powerful anticrime weapon when it operates openly.

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