It’s no secret that the anonymous and entirely digital crypto market is rife with scams, fraud, and crime. Although this only accounts for a small portion of the market as a whole, it is still a thorn in the side of the industry.

It is also one of the main talking points used by anti-crypto crusaders. They often point to digital assets’ role in some criminal activities as a reason why they can’t be considered as legitimate currencies.

It is important to note that centralized exchanges have put up barriers that make it difficult for bad actors to sell illicitly obtained crypto.

However, a new report shows that a few exchanges, in particular, are still seeing massive inflows of funding from “high-risk addresses.”

Report: More Than $1.4 Billion in Illicit Crypto Has Flowed into Exchanges This Year

According to a recent report from the Chinese research firm PeckShield, crypto associated with what they mark as “high-risk addresses” has been flowing into exchanges at an unprecedented rate in 2020.

They note that the addresses that fall into this category include those associated with hackers, darknet marketplaces, and other sources.

In total, they marked 13,927 transactions from the wallets associated with these accounts into crypto exchanges.

They explain that these transactions had a cumulative value of over 147,000 Bitcoin – worth nearly $1.4 billion at the time of writing.

There’s no question that illicit activities are slowing the growth of the crypto market. It is widely known that the now-defunct PlusToken Ponzi scheme placed a massive amount of selling pressure on both Bitcoin and Ethereum.

Some fear the ringleaders of this scheme will continue placing immense pressure on the crypto market for the years to come.

Binance, Huobi, and OKEx are Being Heavily Used by Criminals

As for which platforms are being utilized to offload these illicit crypto holdings, PeckShield notes that Huobi is the most widely used, closely followed by Binance and OKEx.

In total, these three exchanges received 60% of the total amount of Bitcoin transferred throughout the past six months, taking in a combined total of 90,000 BTC.

Image Courtesy of Unfolded. Data Source: PeckShield

They note that the vast majority of these funds are laundered through crypto mixing services while they are en route to the exchanges, making it difficult to be tracked.

As the industry continues to mature, exchanges will likely implement more features to deter the sale of illicitly obtained funds.

Featured image from Shutterstock.