The errors of on-chain analytics companies are huge – FATF


FATF was unable to understand the data of blockchain networks due to the huge spread in the research results provided by on-chain companies.

Blockchain data varies dramatically across different on-chain analytics providers. This is the conclusion reached by the Financial Action Task Force on Money Laundering (FATF), writes on-chain company Chainalysis.

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According to Chainalysis, FATF reached out to a group of on-chain analytics providers in order to find out the activity of transactions in relation to the addresses of cryptocurrency exchanges, as well as outside them. The group includes the following companies: Chainalysis, CipherTrace, Coinfirm, Elliptic, Merkle Science, Scorechain and TRM Labs.

However, the results of the studies did not allow the group to draw an unambiguous conclusion. The FATF concluded that the data provided by analytical companies differed significantly from each other.

“So significant that the FATF noted the difficulty of drawing clear conclusions from the charts,” Chainalysis said.

In the graph below, you can see the spread in the share of bitcoin transactions that took place without contacting cryptocurrency wallets in the period from 2016 to 2020.

Source: fatf-gafi.org

The share of transactions for the specified period is displayed on the left, and the calculation of the share in dollar terms is displayed on the right. An even greater spread can be seen in the graph showing the share of illegal Bitcoin transactions detected over the same period.

Source: fatf-gafi.org

However, it remains unknown for which companies the sample was made. The FATF noted that the discrepancy may be due to the choice of different analysis methods, as well as the company’s experience.

Recall that in mid-May, CipherTrace analysts said that only one percent of Bitcoin transactions are associated with crime. At the same time, about six percent of transactions were made between the exchanges themselves. Most transactions are made between private wallets.

Read about why Binance decided to share information about customers with other crypto-exchanges in the material of the BeInCrypto editorial staff.

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Karice Dabule

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