Crypto Money Laundering Plummets By 29% In Latest Chainalysis Findings
February 15 2024 - 9:00PM
NEWSBTC
According to a recent report published by crypto analytics firm
Chainalysis, money laundering involving crypto assets has
experienced a notable decline compared to the previous year.
However, the report highlights that illicit actors have started
adapting their tactics to evade detection and further obscure the
movement of illicit funds. Evolving Tactics In Crypto Money
Laundering According to the report, illicit addresses sent
approximately $22.2 billion worth of cryptocurrency to various
services in 2023, a significant decrease from the $31.5 billion
sent in 2022. While part of this decline can be attributed to
an overall decrease in legitimate and illicit crypto transaction
volume, the report reveals that money laundering activity witnessed
a steeper drop of 29.5%, compared to the 14.9% decrease in total
transaction volume. Related Reading: XRP Price Alert: Breakout
Could Confirm Today Centralized exchanges remain the primary
destination for funds originating from illicit addresses, with this
trend remaining relatively stable over the past five years.
However, the report indicates a shift in the distribution of
illicit funds, with a growing share being directed towards
decentralized finance (DeFi) protocols. Chainalysis suggests
that this can be attributed to DeFi’s overall expansion during the
same period, although the transparent nature of DeFi platforms
makes them less favorable for obfuscating fund movements. While the
breakdown of service types used for money laundering in 2023
resembled that of the previous year, there were noticeable changes
in specific types of crypto criminals’ money laundering
practices. The report highlights a significant increase in
the volume of funds sent to cross-chain bridges from addresses
associated with stolen funds, indicating a shift towards utilizing
bridge protocols for money laundering purposes. Additionally, there
was a substantial rise in funds sent from ransomware attacks to
gambling platforms and bridges, showcasing the “adaptability and
resourcefulness” of cybercriminals. North Korean Hackers And
Cross-Chain Bridges The concentration of money laundering at fiat
off-ramps, where criminals convert their crypto into cash, remains
a significant concern. While thousands of off-ramping services
operate, most money laundering activity is concentrated in a few
services. In 2023, 71.7% of illicit funds sent to off-ramping
services went to just five services, a slight increase from 68.7%
in 2022. The report also reveals an increase in deposit addresses
receiving large sums of illicit cryptocurrency, indicating a more
diversified approach by criminals to evade detection and mitigate
the impact of frozen accounts. Furthermore, the report highlights
the changing tactics of “sophisticated” crypto criminals,
particularly in the case of North Korean-affiliated hacking groups
like Lazarus Group. According to Chainalysis, these actors
have demonstrated an ability to adapt their money laundering
strategies in response to law enforcement actions. The report cites
the shutdown of mixer services, such as Sinbad, and the subsequent
rise of replacements like YoMix, which has become a preferred mixer
for North Korea-affiliated hackers. Moreover, cross-chain bridges
have seen substantial growth in money laundering activities, with
illicit actors leveraging these protocols to move funds between
blockchains. North Korean hackers, in particular, have been
prominent users of bridge protocols for money laundering
purposes. Related Reading: Bitcoin’s Rise To $52,000 Masks
Potential Pitfalls Ahead, Analyst Warns Ultimately, the report
emphasizes the need for increased diligence and understanding of
“interconnectedness” in fighting crypto crime by targeting money
laundering infrastructure. Featured image from Shutterstock,
chart from TradingView.com
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