March 29, 2024

Coinfirm: "Cryptocurrencies are better protected from money laundering than traditional finance"

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Coinfirm: “Cryptocurrencies are better protected against money laundering than traditional finance”

The head of development at Coinfirm is confident that the development of AML and KYC has made it more difficult to use cryptocurrencies for illegal transactions and this has attracted new investors to the industry.

Analytical Business Development ManagerCoinfirm company Durgham Mushtaha said that unlike fiat currency, transactions with crypto assets are much easier to track using anti-money laundering (AML) tools. 

He added that the introduction of “Know Yourcustomer (KYC) to identify users on major crypto exchanges has led to the creation of a reliable financial system that is more secure from money laundering and other illegal activities than fiat currency. Mushtakha believes that these rules have strengthened the image of the sector.

“I see the next bull market trendwill be a turning point. Investors will dive into crypto in droves as fears dissipate and the sector grows exponentially,” he said.

Mushtakha noted that risk scenario indicators developed for the traditional financial system have been introduced into the crypto sector, including decentralized finance (DeFi).

“How are we different from traditional finance,so it is our analytical processes on the network. Traditional finance doesn't have blockchain, so it's missing a huge piece of the puzzle because the blockchain sector is not isolated,” he said.

According to him, AML is becoming more and moresophisticated in the DeFi space. Mushtakha emphasized that year after year reports confirm a decrease in the use of money laundering, and transactions using illegal addresses account for only 0.15% of 2021 figures.

He added that the US dollar is still the most used and preferred currency for money laundering, as opposed to cryptocurrency.

"Now we can tell if your wallet wasis directly involved in illegal activities or has inherited the risk from another address that received funds through dishonest means. Those involved in illegal activities would be wise to stay away from crypto assets and stick to the trusted dollar,” said a Coinfirm executive.

Recently, the state Department of Financial ServicesNew York (NYDFS) in its first investigation into the crypto industry accused Robinhood Crypto of violating anti-money laundering and user protection rules.