A UK-based company has been linked to the cryptocurrency exchange BTC-e that has been investigated after allegedly conducting money laundering activities. This UK company is known as Mayzus Financial Services or MFS and is currently being investigated. The information was released by NameCoinNews a few days ago.
The BTC-e exchange case related to money laundering activities is far from being closed and it continues to generate new titles and information. This time, NameCoinNews reported that the Russian owned MFS is linked with the crypto exchange BTC-e.
The Anti-corruption NGO Global Witness analyzed the case and gathered the necessary information to arrive at such a conclusion. BTC-e has been investigated due to the fact it has been used by the hacking group called Fancy Bear.
As per the report, the Russian government paid these hackers in order to conduct a series of cyberattacks. Moreover, BTC-e has been under surveillance for operating a money laundering business that helped hackers launder funds from the Mt. Gox hack that took place at the end of 2013 and the beginning of 2014.
It is worth pointing out that Mt. Gox was the largest exchange at that time and the hack heavily affected the whole cryptocurrency market and its credibility. The platform lost 850,000 BTC, which were worth more than $450 million at that time. Many of these BTC were then laundered and exchanged in the BTC-e platform, which has been investigated since then.
BTC-e was also one of the largest cryptocurrency exchanges in the market that handled around $9 billion in cryptocurrency transactions since it was released in 2011. At the same time, the platform was a very important and useful fiat-to-crypto gateway because it helped traders exchange their Euros, U.S. dollars and Russian rubles for cryptocurrencies such as Bitcoin (BTC), Litecoin (LTC), Namecoin, Novacoin, Peercoin, Dash and also Ethereum (ETH).
The report explains that Mayzus Financial Services Ltd. is a company owned by the Russian businessman Sergey Mayzus and it is currently located in Cyprus. At the same time, this firm is operating a brand known as Money Polo, which is currently operational in 130 different countries and has around 400,000 branches around the world. MoneyPolo is offering services to individuals and companies that want to move money across borders in a safe, instant and low-cost manner.
This situation is going to make the legal investigation more difficult considering new parties are being involved. It will be important to closely follow which are going to be the developments regarding this case and how it will be solved.
In the United Kingdom, the Financial Conduct Authority (FCA) is the one in charge of authorising money transfer firms in order to move money internationally and repatriate it. FCA’s reputation is solid in a market that needs to be regulated and controlled at all times.
Criminals have always used Bitcoin and other cryptocurrencies in order to launder money or perform illegal activities. This is due to the fact that these digital assets provide more privacy than traditional financial services and payments and they are also easier to move across borders compared to fiat currencies.
Exchanges have also been used by these criminals to launder money considering the funds should be transformed from cryptocurrencies to fiat if the criminals want to use them on a daily basis. This is why exchanges and other crypto-related platforms have been investigated and scrutinized by regulatory authorities around the world.
The United States, for example, has established hard regulations for crypto-related companies to start operating. Some states require firms that offer crypto services to apply for a license that may be very difficult to get.
Additionally, several governments and jurisdictions started implementing Know-Your-Customer (KYC) and Anti-Money-Laundering (AML) policies. Eventually, they have also created Anti-Terrorism-Financing (ATF) rules that must be closely followed by exchanges and other crypto services providers.
The legitimacy of the cryptocurrency space and the whole crypto industry has been affected by a large number of cases related to criminals and money laundering involving cryptocurrencies. Despite this, a small part of all the transactions is used for illicit activities.
Around 2% of Bitcoin transactions are considered illicit and 21% of the transactions are lawful. The remaining 77% is still unclassified considering it is sometimes difficult to understand who are the sender and the receivers of the transactions.
Meanwhile, major banks and other financial institutions in different jurisdictions have also been involved in money laundering activities during the last few years. Many of them had to pay large fines due to helping criminal organizations to launder money.
Indeed, HSBC, BNP Paribas or JP Morgan have all been involved in different illicit activities, including handling money from drugs, evading taxes and more. This shows that despite the current negative narrative around Bitcoin and cryptocurrencies, banks have also been the favourite tools used by criminals to handle proceedings from illegal sources.
Cryptocurrencies can be very useful and helpful for many investors and individuals. They are fast and simple to use and do not need to be handled by a centralized authority. This is certainly a positive thing taking into account is the first time that a financial system can be based on decentralized currencies that eliminate all the intermediaries.
Although there are exchanges and platforms that have been used by criminals, this doesn’t mean that the whole crypto market is related to criminals. BTC-e will have to solve its legal issues in the future and find a solution to the accusations received. This is not an easy task and the involvement of a company from the United Kingdom does not make things easier.
Regulations in the cryptocurrency market would be very useful to help exchanges and other firms behave as the law requires and providing transparency to the whole crypto space that is currently in need of clear rules and information.
Some countries are already leading the space in regards to these matters. Some of the countries with clear regulations include Switzerland and Malta. Meanwhile, other jurisdictions are trying to establish a friendly and clear framework that would help firms and companies offer services to crypto users in the market and also reduce the uncertainty in the space.