Summary
The cross-currency trading platform offers its clients digital currency trading services through an account with another trading platform. It does not directly facilitate the trading process itself, but rather acts as an intermediary between users and other service providers. Overlapping is typically used in the traditional banking system to provide services that a specific bank cannot provide, such as international transfers.
In the cryptocurrency space, identity authentication and anti-money laundering processes on cross-platform exchanges are lax or non-existent. Cybercriminals often take advantage of non-compliance. Overlapping trading platforms thus help support money laundering, fraud and ransomware.
When you trade with a cross-platform, you entrust it with the safekeeping of your assets. These platforms offer less security and guarantees than compliant centralized or decentralized trading platforms. You may also face legal problems due to dealing with overlapping trading platforms that are subject to sanctions.
If you use a trading platform, make sure it has proper identity authentication and anti-money laundering checks. These processes often take a few days to process. If the platform allows you to trade almost instantly without limits, you should check it further. A legitimate trading platform will not hide how your trades work, and you will easily be able to view the source of your funds on the blockchain explorer.
the introduction
When you buy and sell cryptocurrencies, it is essential that you trade using a reliable website. But you need to be patient when completing identity verification and anti-money laundering processes to stay safe. For this reason, some users choose to use trading platforms that offer instant trading with little or no verification at account creation.
Some of them may be legitimate decentralized exchanges, others may be cross-border exchanges that deal with stolen and laundered funds. There is no guarantee that your funds will be safe with a cross-trading platform. To make sure you stay safe with your cryptocurrencies, it's important to understand what cross-trade platforms are, what they do, and how you can identify and discover them.
What is interference?
Overlap occurs when a financial services provider creates an account with another financial institution to use its services. The account holder then plays the role of an intermediary, providing services to his clients through the overlapping account. This happens for several reasons, for example when a bank in one country provides its banking system and services to a bank operating in a different country, called a correspondent bank.
Imagine a customer who wants to transfer money to a bank account in Australia. His bank may not be able to do this, but he can use a correspondent bank to transfer money to him. The customer's bank will process the transfer request through its overlapping account with the correspondent bank. The correspondent bank must take care and conduct due diligence regarding the bank it deals with. Thus, the correspondent bank provides its services to clients it does not know, so it must trust the overlapping account holder.
What is a cross-currency trading platform?
The cross-platform cryptocurrency trading platform works in a fairly simple way. A person or entity creates an account on a regulated trading platform. He can then use this account to provide trading services to third parties via his overlapping account. These overlapping trading platforms are sometimes known as spot trading platforms and often have multiple accounts on different trading platforms.
Some platforms may require identification documents, while others may require little or no identification. This makes it a popular choice among scammers, scammers, and ransomware seekers. Some cross-trading platforms even allow for the buying and selling of cryptocurrencies for cash in person.
What is the danger from interference?
One of the biggest problems with traditional finance is the risk of money laundering. Since the correspondent bank only deals directly with the primary respondent bank, it cannot be sure who it is dealing with. This overlap therefore necessitates enhanced due diligence checks from the primary bank. Individuals or entire countries may be blacklisted and subject to sanctions. If the primary bank does not comply, the responding bank may eventually turn out to be supporting illegal activities, such as avoiding sanctions or money laundering.
As the cryptocurrency industry is still trying to develop strong regulations, it is easier for cross-platform trading platforms to operate under the radar. An over-the-counter exchange can easily open an account with a major cryptocurrency exchange without the major exchange knowing about it.
What are the risks of the cross-currency trading platform?
When you use a cross-currency trading platform, not only does it harm the centralized trading platforms, but you and your funds are also at risk for several reasons, which are:
1. The security of your deposited funds is less guaranteed than on regulated trading platforms.
2. May support illegal activities that finance crime and terrorism.
3. Regulatory authorities may shut down the trading platform which will cause you to lose your cryptocurrencies or other funds.
4. You may face legal repercussions from law enforcement if you knowingly engage with a trading platform involved in illegal activities.
The best way to avoid these risks is to not use overlapping cryptocurrency trading platforms. It can be difficult to recognize because it is not always obvious. Follow our tips that we will mention later to have the best chance of protecting yourself.
What is the difference between a cross-platform and a decentralized trading platform?
A cross-trading platform and a decentralized trading platform look similar at first glance. Decentralized trading platforms do not require any identity verification processes, and identity verification processes on decentralized exchanges may be lax or non-existent. But the way transactions are conducted is different. A decentralized trading platform will connect buyers to sellers directly or even use liquidity pools. The trading platform never holds the cryptocurrencies in circulation, but rather smart contracts take care of this process. A cross-trading platform holds your cryptocurrencies directly and uses the services of another trading platform.
Suex cross trading platform incident
Let's look at a real-life example. On September 21, 2021, the Office of Foreign Assets Control (OFAC) imposed sanctions on Suex, a cryptocurrency trading platform founded in the Czech Republic and operating out of Russia. OTC trading platform Suex has been offering cryptocurrency trading services using Binance and other major trading platforms to serve its clients. Suex had little or no authentication and offered a private cash-for-crypto trading service.
According to research firm Chainalysis, Suex has helped launder a significant amount of money from ransomware attacks and hacks. Binance proactively deactivated several Suex-linked accounts, and OFAC blacklisted approximately 30 Bitcoin, Tether, and Ethereum wallets. The cancellation of Binance accounts included Chatex, a cryptocurrency bank with links to the Suex platform. Chatex Bank has since faced related sanctions imposed by OFAC. Everyone who dealt with Suex is now in legal jeopardy and its website has been shut down since OFAC's decision.
How to discover a cross-trading platform?
Cross-trading platforms usually don't make it clear that they are cross-trading platforms. The following points are a good start to discovering the cross-trading platform and keeping you and your funds safe:
1. There are no or minimal verification or anti-money laundering requirements. Creating an account on a trading platform almost instantaneously without any limits is a harbinger of risk.
2. The user interface does not clearly show where trading is taking place.
3. There is no clear statement that the platform facilitates trades. A legitimate trading platform will make it clear that trading operations occur directly through its platform and not through an overlapping account.
4. The trading platform aggregates different prices that you can choose from, which means that the trading platform uses overlapping accounts on multiple trading platforms.
5. If you suspect you have used a cross-trading platform, try tracking the path of your cryptocurrencies on the blockchain using the Blockchain Explorer. You may find that it came from a wallet linked to another trading platform.
Concluding thoughts
You'll be safer buying Bitcoin, BNB, and other cryptocurrencies through a regulated cryptocurrency exchange like Binance. Although creating an account for the first time may take some time, our identity verification and anti-money laundering procedures will keep you safe. You should deal with the trading platform as you deal with any other financial institution, and carry out due diligence procedures before using it.