Wallet Rotation: When Deposit Addresses Lie
Independent researcher Richard Sanders has reignited debate over one of crypto’s most pervasive but least addressed obfuscation tactics: wallet cycling.
By rapidly rotating deposit and withdrawal addresses - sometimes daily, exchanges like Iran’s Nobitex, Russia’s Garantex and unlicensed OTC brokers make it nearly impossible for law enforcement, regulators, or tax authorities to link activity to a single service. Sanders argues that while major blockchain analytics vendors boast powerful visualization tools, they largely function as sales-driven organizations rather than field intelligence units, leaving thousands of active wallets uncollected and unlabeled.
The implications are stark: wallet cycling strips regulators of visibility, lets OTCs quietly process sanctions evasion, and inflates exchange “volume” that industry leaders then tout as adoption rather than laundering. Evidence Sanders shared shows sanctioned entities fully nested within mainstream exchanges like Huobi (HTX), running unique deposit addresses without ever being tagged. Meanwhile, firms like Nominis with far fewer resources, have flagged over 5,000 hot wallets linked to terror financing, scams, extortion, and sanctions evasion, highlighting how much ground truth the big players miss.
The conclusion is uncomfortable: unless analytics firms expand beyond dashboards and PR into continuous wallet collection and local agent-style presence, the cycle will continue - with obfuscation masquerading as adoption, and illicit flows hiding in plain sight.
Privacy Exchange TradeOgre Seized by RCMP in Landmark $56M Enforcement
The RCMP has dismantled TradeOgre in Canada’s largest crypto seizure: over $56M in BTC, ETH, XRP, LTC, and more. Investigators allege the exchange ran with zero AML compliance: no FINTRAC registration, no KYC, no reporting, enabling systematic laundering where most volume came from illicit sources.
On-chain, seized funds were traced to RCMP-controlled wallets, visible through law enforcement custody markers. For users, all funds are now frozen pending investigation, with recovery prospects unclear.
This is Canada’s first full exchange takedown - a precedent showing that when a platform becomes a laundering hub, regulators will move decisively, with blockchain evidence providing transparency block by block.
Sanctions Hit Iranian Shadow Banking as OFAC Blacklists Crypto Wallets
OFAC has sanctioned two Iranian facilitators and over a dozen Hong Kong and UAE front companies for laundering proceeds of Iranian oil sales through cryptocurrency, benefiting the IRGC-Qods Force and Iran’s Ministry of Defense.
According to TRM Labs, the scheme relied on overseas “shadow banking” networks and blockchain rails using BTC, ETH, USDT, and TRX addresses to move funds discreetly outside traditional banking.
Chainalysis noted the network facilitated over $100M in crypto purchases tied to oil sales between 2023–2025, with sanctioned wallets seeing more than $600M in total inflows. By adding these wallets to the SDN list, Treasury has made clear: crypto is no longer a peripheral tool, but a core channel in Iranian sanctions evasion.
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