One of the prominent blockchain analysis firms, known as CipherTrace, recently run deep analysis on the cryptocurrency exchanges and revealed shocking facts. Based on the analysis, it has been revealed that more than 55% of cryptocurrency exchanges have KYC identification protocols that are below the required benchmark.
As a result of these findings, these cryptocurrency exchanges are now enlisted as the offenders. What is more alarming is that the listings belong to Europe, the U.K., and the United States of America. This revelation has rippled a wave of discontent and nervousness among the crypto-community based in these regions.
Adding to their report, CipherTrace mentioned that in order to conduct the analysis, they gathered data from more than 800 exchanges. These exchanges comprised of centralized, decentralized, and market maker automation. Once the data was analyzed after collection, it highlighted a shocking figure of 56% exchanges, who were failing to adhere to the set KYC protocols.
CipherTracer made another shocking claim stating that the majority of the offenders of KYC guidelines belong to Europe. This has shocked the crypto-community even more as the European region is considered to be the strictest when it comes to cryptocurrency regulations. They added that out of all the exchanges they studied, 60% of the defaulters belong to Europe.
After Europe, the countries with exchanges with the weakest KYC protocols are Russia, the United Kingdom, and the United States of America. CipherTrace mentioned that Hong Kong is also among countries, which have crypto-exchanges with the weakest KYC adherence.
KYC protocol in full form means Know-Your-Customer protocol that Governments from around the globe have demanded to be implemented no matter the sector. The reason for such pressure from the Governments is to ensure the prohibition of money-laundering and identification of potential terrorist activities.
In their analysis report, CipherTrace has also mentioned that these exchanges are deliberately not adhering to the KYC protocols. Furthermore, the majority of the exchanges even hide their operating location in order to evade the regulations.
CipherTrace has also pointed out that 70% of the exchanges registered from Seychelles have shown extremely poor KYC adherence. They further added that this could mean that Seychelles is harboring the majority of money-launderers.