As per a detailed analysis by CipherTrace, a global leader in cryptocurrency intelligence, major banks in the US unknowingly are processing about $2 billion digital currency transactions every year.
The research by CipherTrace labs discovered that the top 10 US retail banks presently have unregistered cryptocurrency MSBs, and that is inclusive of crypto exchanges and transmitting funds on their payment networks. The analysis also revealed that the unnoticed cryptocurrency fund transfers are posing a problem to the Anti-Money Laundering compliance.
To deal with this, CipherTrace Labs have introduced a tool to aid identification of transactions and evaluate the risk profiles of Virtual Assets Service Providers (VASPs).
CipherTrace also states that financial institutions that inadvertently process cryptocurrency transactions lack the latest technology developed to detect such transfers. Additionally, banks need to identify and report MSB-derived transactions to the Financial Action Task Force (FATF) experts. Experts also speculate that soon banks will have to comply with the latest FATF regulatory policy by complying with identification and compliance requirements that deal with cryptocurrencies.
Dave Jevans, CEO CipherTrace, added, “Financial institutions are exposed to cryptocurrency-related risks because they have no way to detect underlying threats.”