Crypto Money Laundering Plummets By 29% In Latest Chainalysis Findings

Ronaldo Marquez

1 year ago

3 mins read

Reason to trust

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Created by industry experts and meticulously reviewed

The highest standards in reporting and publishing

How Our News is Made

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Ad discliamer

Morbi pretium leo et nisl aliquam mollis. Quisque arcu lorem, ultricies quis pellentesque nec, ullamcorper eu odio.

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.

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.

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

Ronaldo Marquez

Ronaldo is an experienced crypto enthusiast dedicated to the nascent and ever-evolving industry. With over five years of extensive research and unwavering dedication, he has cultivated a profound interest in the world of cryptocurrencies.

Ronaldo's journey began with a spark of curiosity, which soon transformed into a deep passion for understanding the intricacies of this groundbreaking technology.

Driven by an insatiable thirst for knowledge, Ronaldo has delved into the depths of the crypto space, exploring its various facets, from blockchain fundamentals to market trends and investment strategies. His tireless exploration and commitment to staying up-to-date with the latest developments have granted him a unique perspective on the industry.

One of Ronaldo's defining areas of expertise lies in technical analysis. He firmly believes that studying charts and deciphering price movements provides valuable insights into the market. Ronaldo recognizes that patterns exist within the chaos of crypto charts, and by utilizing technical analysis tools and indicators, he can unlock hidden opportunities and make informed investment decisions. His dedication to mastering this analytical approach has allowed him to navigate the volatile crypto market with confidence and precision.

Ronaldo's commitment to his craft goes beyond personal gain. He is passionate about sharing his knowledge and insights with others, empowering them to make well-informed decisions in the crypto space. Ronaldo's writing is a testament to his dedication, providing readers with meaningful analysis and up-to-date news. He strives to offer a comprehensive understanding of the crypto industry, helping readers navigate its complexities and seize opportunities.

Outside of the crypto realm, Ronaldo enjoys indulging in other passions. As an avid sports fan, he finds joy in watching exhilarating sporting events, witnessing the triumphs and challenges of athletes pushing their limits. Furthermore, His passion for languages extends beyond mere communication; he aspires to master German, French, Italian, and Portuguese, in addition to his native Spanish. Recognizing the value of linguistic proficiency, Ronaldo aims to enhance his work prospects, personal relationships, and overall growth.

However, Ronaldo's aspirations extend far beyond language acquisition. He believes that the future of the crypto industry holds immense potential as a groundbreaking force in history. With unwavering conviction, he envisions a world where cryptocurrencies unlock financial freedom for all and become catalysts for societal development and growth. Ronaldo is determined to prepare himself for this transformative era, ensuring he is well-equipped to navigate the crypto landscape.

Ronaldo also recognizes the importance of maintaining a healthy body and mind, regularly hitting the gym to stay physically fit. He immerses himself in books and podcasts that inspire him to become the best version of himself, constantly seeking new ways to expand his horizons and knowledge.

With a genuine desire to become the best version of himself, Ronaldo is committed to continuous improvement. He sets personal goals, embraces challenges, and seeks opportunities for growth and self-reflection. Ultimately, combining his passion for cryptocurrencies, dedication to learning, and commitment to personal development, Ronaldo aims to go hand-in-hand with the exciting new era that the emerging crypto technology is bringing to the world and societies.

Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.