How is cryptocurrency traceable? The federal focus on crypto-related crime, combined with the increasing sophistication of law enforcement tools to trace illicit cryptocurrency payments, means that such dealings are not anonymous. But aside from the uptick in resources dedicated to stopping crypto crime, there's a simpler reason why these kinds of transactions aren't really anonymous for regular Americans.
How are suspicious crypto transactions reported? KYC refers to a financial services industry standard that protects against money laundering and other financial crime. For example, institutions under the Federal Deposit Insurance Corporation must have a clear relationship with their clients to develop a "customer risk profile," which is used to identify and report suspicious transactions to authorities.