Bitrace Issues Warning as 34 Billion Risky USDT Tokens Flow Into OTC Addresses

Bitrace, a leading blockchain-focused analytics firm, revealed that in the past 24 months, 34.39 billion risky TRC20 USDT tokens have flowed into OTC addresses.

These USDT addresses are potentially susceptible to being labeled for money laundering and other crimes. As a result, Bitrace calls for caution as users who interact with these OTC addresses are at risk of being flagged by authorities.

Bitrace on Address Pollution

In the latest Bitrace report, the intelligence firm highlighted how these risky wallets could pollute an address. More than half of the 34.39 billion USDT that has flowed into these addresses is designated medium to high risk.

Of this number, 14.7% USDT has been associated with online gambling, gray and black industries make up 20.1%, and money laundering accounts for 19.4%.

With the anonymity feature that most traders now employ on OTC platforms, Bitrace noted that users are generally more susceptible to being victims of these contaminated addresses. While this anonymity feature is becoming a trend, Bitrace believes OTC platforms and their users suffer the biggest brunt of the menace overall.

With many top centralized trading platforms also offering advanced OTC services, Bitrace believes the emergence of risks occurs due to the differences in Know-Your-Customer (KYC) implementations across the board.

To prevent being flagged, Bitrace noted that individual users should take caution and embrace only compliant platforms for their OTC deals.

Prevalence of OTC in the Crypto Market

Although most users trade crypto directly on exchanges, OTC allows users to enter and exit funds easily. As reported earlier by The Crypto Basic, popular exchange Uphold launched OTC trading services for XRP and other assets in June.

The Uphold move hinges on competing with existing players like Binance, whose US entity supports OTC deals for altcoins such as Shiba Inu. OTC services have evolved and have notably become a lifeline for firms like Ripple.

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