Money laundering involving cryptocurrencies soared by 30% last year, as cyber criminals increasingly turn to high tech platforms to conduct illicit activities.
According to a new report published by analysis firm Chainalysis on Wednesday, over $8.6 billion worth of cryptocurrencies were laundered via illegal activities last year. More than $33 billion has already been lost since 2017, with the majority of the funds being transferred through centralized exchanges. However, come 2021, the criminals resorted to more advanced DeFi platforms instead, which accounted for 17% of the total laundered funds— up from 2% compared to 2020.
The analysts noted that the sudden jump in cryptocurrency laundering is not surprising, particularly given the sharp growth in both illicit and legal virtual currency activity last year. The report found that high-risk exchanges, crypto mining pools, and mixers— which are comprised of both legal and illegal funds in order to obstruct the original address, also saw a surge in cryptocurrency collected from wallets related to criminal activity.
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But, the analysts cautioned that the money laundering statistics were likely significantly higher in 2021, as the figures only depict funds stolen via “crypto-native” crime, such as ransomeware attacks or sales on the dark net. “It’s more difficult to measure how much fiat currency derived from off-line crime – traditional drug trafficking, for example – is converted into [crypto] to be laundered. However, we know anecdotally this is happening,” read the report.
Information for this briefing was found via Chainalysis. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
