Abstract

The nested cryptocurrency trading platform uses accounts on other trading platforms to provide cryptocurrency trading services to customers, but does not itself directly facilitate transactions. Instead, the platform bridges users with other service providers. Nesting is a conventional means of traditional banking that provides services that a particular bank cannot offer, such as international transfers.

In the cryptocurrency industry, identity authentication and anti-money laundering procedures for nested trading platforms are generally lax or even completely unregulated. A widespread lack of compliance allows cybercriminals to take advantage, turning nested trading platforms into breeding grounds for money laundering, fraud and ransomware payments.

Using a nested trading platform to trade is equivalent to an individual trusting assets to the platform. Compared with compliant centralized or decentralized trading platforms, nested trading platforms lack security and reliability guarantees. You may also face legal issues if you deal with sanctioned nested trading platforms.

When choosing a trading platform, please confirm whether it has appropriate identity authentication and anti-money laundering checks, which generally take several days to process. If a trading platform enables virtually unlimited real-time trading, a deeper investigation is necessary. Legitimate trading platforms do not hide transaction methods, and the source of funds can be easily viewed through a blockchain browser.

Introduction

Cryptocurrency buying and selling must be done through trustworthy websites. To ensure security, users need to be patient enough to complete identity authentication and anti-money laundering checks. Some impatient users turn to real-time trading platforms that have fewer registration rules or even no verification.

While some of these are legitimate decentralized exchanges, others may be nested exchanges that handle stolen funds and money laundering. The security of personal funds cannot be guaranteed by using nested trading platforms. To keep one's cryptocurrency safe, it is crucial to understand the concept of nested trading platforms, their role and how to identify them.

What is nesting?

Nesting refers to the act of one financial service provider creating an account with another financial institution and using its services. Account holders act as a bridge, providing services to their own customers through nested accounts. There are many reasons for this. For example, banks in one country can provide business services and ecosystems to banks in other countries, which is called agency banking.

Suppose a customer wishes to transfer money to a bank account in Australia, and their bank may not be able to do so, a correspondent bank will be used to transfer the money for the customer. The customer's bank processes the transfer request through its nested account at the correspondent bank. Agent banks must exercise caution and conduct due diligence on partner banks. Correspondent banks are essentially providing services to customers whom they know nothing about, and therefore require trust in the nested account holder.

What is a nested cryptocurrency trading platform?

The way the nested cryptocurrency trading platform works is quite simple. An entity or individual creates an account on a regulated trading platform and then uses this account to provide trading services to third parties through its own nested account. These nested trading platforms are sometimes called "instant trading platforms" and often have multiple accounts on different trading platforms.

Some nested trading platforms require certification documents, but many more require almost no certification information. This attracts fraudsters, fraudsters and extortionists. Some nested exchanges even make it possible to buy and sell cryptocurrencies face-to-face with cash.

What are the dangers of nesting?

One of the most difficult problems in traditional finance is the risk of money laundering. Agent banks only have direct business dealings with the relevant entrusting banks, and there is no way to determine the identity of the customer they are dealing with. Therefore, nesting must increase due diligence on the banks involved. Otherwise, individuals and even entire countries risk being blacklisted and subject to sanctions. If the banks involved do not comply, the entrusting bank may end up being involved in illegal activities, such as sanctions evasion or money laundering.

The cryptocurrency industry is in the stage of improving regulations, which is an opportunity for nested trading platforms to take advantage of loopholes. Nested trading platforms allow you to quietly open accounts on major cryptocurrency trading platforms.

What are the dangers of nested cryptocurrency trading platforms?

The use of nested cryptocurrency trading platforms will harm not only the interests of centralized trading platforms. The personal safety of users and their funds will also be at risk for the following reasons:

1. Compared with regulated trading platforms, the security of user deposits is weaker.

2. Users may be involved in illegal events related to financing crimes and terrorism.

3. Regulatory agencies may shut down such trading platforms, causing users to lose cryptocurrency or other assets.

4. If users intentionally cooperate with trading platforms involved in illegal activities, they will face legal prosecution from law enforcement agencies.

The best way to avoid danger is not to use nested cryptocurrency trading platforms. This type of platform is deeply hidden and difficult to identify. Follow our tips below to keep yourself as safe as possible.

What is the difference between nested trading platforms and decentralized trading platforms?

First of all, nested trading platforms and decentralized trading platforms look similar. Decentralized trading platforms do not require identity authentication, while nested trading platforms have loose identity authentication procedures or no authentication at all. However, the two handle transactions in completely different ways. Decentralized exchanges directly connect buyers and sellers and even use liquidity pools. The platform never regulates the cryptocurrencies traded, instead smart contracts handle the transaction process. Nested trading platforms directly monitor users’ cryptocurrencies and use the services of other trading platforms.

Suex nested trading platform incident

Let’s take a look at a real case. On September 21, 2021, the U.S. Office of Foreign Assets Control (OFAC) imposed sanctions on the cryptocurrency trading platform Suex. Suex is registered in the Czech Republic and operates in Russia. Suex OTC leverages Binance and other large exchanges to provide customers with nested cryptocurrency trading platform services. Suex requires almost no identity verification and can even exchange cash for cryptocurrencies face-to-face.

Chainalysis research pointed out that Suex laundered funds for a large number of ransomware attacks and hacking attacks. Binance proactively deactivated multiple Suex-related accounts, and the Office of Foreign Assets Control (OFAC) blacklisted nearly 30 different wallets, including Bitcoin, Tether, and Ethereum wallets. Binance also suspended cooperation with cryptocurrency bank Chatex. Chatex was rumored to have business ties with Suex, and was subsequently sanctioned by the Office of Foreign Assets Control (OFAC). All individuals who have dealt with Suex are currently at legal risk. Chatex has shut down its website since the sanctions decision by the Office of Foreign Assets Control (OFAC).

How to identify nested trading platforms?

The nested trading platform will not reveal its true colors to the world. The following points are the basic methods to identify nested trading platforms to ensure personal and financial security:

1. The platform does not require identity authentication or anti-money laundering verification, or the verification requirements are very low. The fact that the trading platform can register in real time and without restrictions is an obvious warning.

2. The user interface does not clearly show where to trade.

3. The trading platform does not clearly state that it can facilitate transactions. Legitimate trading platforms will state that transactions are conducted directly through their own platforms rather than nested accounts.

4. The trading platform summarizes different rates for users to choose from. This means that the trading platform is using nested accounts from multiple trading platforms.

5. If you suspect that you have used a nested trading platform, please try to track the trajectory of the cryptocurrency in the blockchain through a blockchain browser. You may find that the cryptocurrency is associated with other trading platforms. wallet.

Summary

Buy Bitcoin through regulated cryptocurrency exchanges like Binance , Binance Coin and other digital currencies to ensure safety. While initial registration takes some time, proper identity verification and anti-money laundering procedures can help keep individuals safe. Users should treat trading platforms and other financial institutions equally and conduct due diligence before using them.