bc1qmxjefnuy06v345v6vhwpwt05dztztmx4g3y7wp (James Zhong seizure) - the funds have been moving past few days, one of my colleagues from the CQ VA has pointed this out, looks like someone has systematically been moving funds so that they don't trigger KYT/KYC/AML automated filters/algos when they hit exchanges.
#Bitcoin #Blockchain #Surveillance #Systematic #Evasion #USG #Seized #Funds
Here's a WIP BreadCrumbs app report (it's a mess, but the systematic approach is clearly visible)
bc1qm...3y7wp (J. Zhong seizure) - systematic surv - Breadcrumbs
Report of systematic funds splitting and obfuscation by hops in order to make sure the automated KYC/KYT/AML algos don't pick it up when it hits ex...
Someone has been splitting funds into bits and pieces small enough so that when they hit exchanges, they don't trigger automated KYT/KYC/AML algo/filters threshold, also, if you have a look at the average amount of hops off the USG seized address all the way before they hit exchanges, there goes your answer to "how far" does the KYT process go in terms of number of hops beyond which the algos deem the tx "safe"
Speculation:
- looks like this was done by an automated algorithm.
Conclusion:
- Someone was systematically splitting the funds into small bits and pieces enough so that they don't go past the trigger thresholds
- Someone was systematically making sure a certain number of hops is in between the source seized funds address and the exchanges so that the illicit funds labelling doesn't get triggered, either.
- Someone MUST have known the parameters for the tx size which would cause KYT algos to get triggered, someone MUST have known the parameters in terms of "how far" as in how many hops away doesn't the algo care anymore
- further speculation - The person setting the parameters up or the person making this happen MUST have SOMEHOW been aware of the parameters which would trigger exchanges asking questions. (E.g. a Chainalysis insider likely provided information how to avoid automated detection to the one doing these transactions, alternatively the person doing these transactions must have social engineered their way to the information via a contact in Chainalysis/possibly exchanges - clearly there's collusion involved)
- it's a mess to do it manually, it's 11pm evening time here, I'm knackered, if/as time permits, I'll see if by any chance I can look into this further, though manually it will likely take a lifetime to dissect...
