Bitcoin

LocalBitcoins has implemented Elliptic tools to track transactions

P2P platform LocalBitcoins has added two transaction tracking tools from analytics firm Elliptic to minimize fraudulent transactions and operate in accordance with AMLD5.

LocalBitcoins announced this week that it is using the Elliptic Navigator risk analysis tool and the Lens wallet verification tool to counter criminal-related cryptoasset transactions.

Recall that in June, the analytical company CipherTrace analyzed international cryptocurrency exchanges for the presence of transactions with illegally obtained cryptoassets and found that Finnish cryptocurrency exchange sites rank first in receiving dirty bitcoins. 12.01% of the BTC entering these sites is of illegal origin, with 99% of it coming from LocalBitcoins. 

Now, Helsinki-based P2P platform LocalBitcoins is strengthening its anti-money laundering efforts in line with the European Union’s Fifth Anti-Money Laundering Directive (AMLD5), as well as new Finnish rules for cryptocurrency operators.

In anticipation of tightening regulation, LocalBitcoins implemented a four- tier user verification system, disabled the option of exchanging cryptocurrencies in person for cash, and also suspended services to users from Iran in response to US sanctions.

Elliptic lead researcher Tom Robinson said such policy changes at LocalBitcoins resulted in a 50% reduction in crypto-asset inflows from darknet markets over the year.

“The decline in the flow of cryptoassets from the darknet markets to P2P platforms is an obvious consequence of the fact that these enterprises are introducing strict KYC and AML controls,” he said. “Criminals will now think twice before trying to cash out through major P2P platforms.”

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