The Bank of Italy recently published a report in which the authority flagged certain Bitcoin peer-to-peer (P2P) platforms as facilitators of criminal activity, calling them “Crime-as-a-service.”
The report titled “Money laundering and blockchain: can you follow the trail in the crypto world?” highlights how unregulated P2P services are enabling money laundering under the central bank’s jurisdiction.
Bank of Italy Raises Concern over Money Laundering Via Blockchain
The bank’s report referred to platforms like kycnot.me, which allow users to trade Bitcoin without undergoing Know Your Customer (KYC) verification. This lack of identity checks, combined with anonymous transaction mechanisms, has created a fertile ground for criminals to obscure illicit funds.
Events like “Satoshi Spritz,” community-driven meetups for Bitcoin trading and education, were also flagged as potential conduits for money laundering, despite their legitimate intentions.
However, the bank has acknowledged the development of technological solutions to counter money laundering and illicit transactions. It writes
The official report reads: “To balance privacy needs with the control of the risk of illicit use, the market is developing technological solutions that, in the absence of intermediaries and other subjects, attempt to encode the necessary control systems in smart contracts; in particular, several experiments use ZKP technology that allows selective disclosure of information, so that access to specific decentralized services can be reserved to legitimate addresses.”
Despite blockchain technology’s inherent transparency, criminals exploit its nature to mask their tracks. The report outlines key strategies used by money launderers, including crypto mixers, chain-hopping, and anonymous wallets.
To combat the misuse of cryptocurrencies, the Bank of Italy has called for stricter KYC and anti-money laundering (AML) protocols. Strengthening regulations, especially in high-risk countries identified by the Financial Action Task Force (FATF), could curb criminal exploitation of Bitcoin P2P platforms.
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