Crypto money laundering up by one third in 2021 but still below record


A new report from Chainalysis reveals that $8.6 billion was laundered using cryptocurrencies in 2021. This is 25% more than in 2020, but still well below the 2019 high.

That year, $10.9 billion was laundered through cryptocurrencies. Chainalysis estimates that a total of $33.4 billion in cryptocurrency has been laundered since 2017.

Chainalysis notes that $33.4 billion in crypto-laundering has disappeared since 2017, compared to the roughly $2 trillion in fiat money laundered annually from offline crimes such as drug trafficking. However, making a reliable estimate of the amount of money laundering in fiat currencies is more difficult than it is in cryptocurrencies due to the use of untraceable cash in offline crime. Reports say:

“The biggest difference between cash-deposit-based money laundering and crypto-based money laundering is that because of the inherent openness of block chains, it’s easier for us to track how criminals move cryptocurrency between wallets and services in their attempts to monetize their money.”
According to the cybersecurity analysis provider, the value of the laundered cryptocurrency is taken from “crypto crimes” where “profits are almost always made in cryptocurrencies rather than fiat.”

For the first time since 2018, central exchanges (CEXs) accounted for less than half (47%) of money laundered, indicating a possible change in the behavior of cybercriminals. The utility of decentralized finance (DeFi) protocols for illegal addresses has increased by nearly 2,000%, from 2% in 2020 to 17% in 2021.

Hackers, like the notorious North Koreans who stole nearly $400 million, strongly favored DeFi, while fraudsters favored CEX, which Chainalysis attributes to a “relative lack of sophistication.”

Chainalysis stated that “high-risk mining pools, exchanges, and mixers have also significantly increased the value of illegal addresses.”

Among the money laundered in 2021, the five largest money laundering services accounted for a larger share (58%) in 2021 than in 2020 (54%). However, the overall focus of money laundering decreased in 2021 with 583 addresses receiving at least $1 million in deposits, compared to 270 addresses in 2020.

Related Topic: The Total Impact of Cryptocurrency Will Decline in 2022: Chain Analysis

After assets, altcoins saw the most concentration with 68% of money launderers going to the top 20 deposit addresses used for illegal activities. Ethereum (ETH) came next at 63%, altcoins were flat at 57%, and Bitcoin (BTC) was the least concentrated with only 19% of top addresses coming in.

Source: CoinTelegraph


Please enter your comment!
Please enter your name here