From a U.S. and EU perspective, lumping regulated exchanges in with the rest of their competitors is misleading at best. In our experience, there is a clear difference between exchanges dedicated to compliance, and those that are not. The regulated exchanges generally possess robust KYC programs and spend a significant amount of effort in tracing transactions through high-risk touch-points including high-risk jurisdictions, mixing/tumbling services and exchanges with known compliance control deficiencies.
What the author and related (unpublished) study are attempting to detail isn't a "crypto problem," it's a jurisdictional risk problem similar to that faced by traditional financial institutions, global trade companies, and the like. Any transaction that touches Venezuela, Russia, Mexico, or Myanmar is subject to a high-risk review of the entities involved and nature of activity due to the jurisdictional attributes, not just because crypto is a "scam" or inherently less transparent than traditional money.
As revealed exclusively to CoinDesk, a global study of 216 exchanges by the reg-tech startup Coinfirm found 69 percent of these businesses do not have “complete and transparent” know-your-customer (KYC) procedures. The study also found that only 26 percent of exchanges had a “high” level of anti-money laundering (AML) procedures, such as ongoing transaction monitoring and in-house compliance staff with experience in AML. While some people may see anonymous trading as a feature of the cryptocurrency market, it can also enable problematic business practices and criminal or terrorist activity. Coinfirm CEO Pawel Kuskowski told CoinDesk many such platforms require just a crypto wallet address to get started. Overall, there were several exchanges – including Coinsquare, Coinbase, Gemini and the Circle-owned Poloniex – that Coinfirm’s Kuskowski identified as “low risk” due to official licenses and strict KYC/AML policies.