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Crypto Money Laundering Plummets By 29% In Latest Chainalysis Findings

Crypto Money Laundering Plummets By 29% In Latest Chainalysis Findings
© Copyright Image: Crypto Breaking News

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.

Decrease in crypto asset laundered in 2023 compared to 2022. Source: Chainalysis

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 DeFis 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. 

The daily chart shows the total crypto market caps valuation at $1.89 trillion. Source: TOTAL on TradingView.com

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Source: NewsBTC.com

The post Crypto Money Laundering Plummets By 29% In Latest Chainalysis Findings appeared first on Crypto Breaking News.

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Text source: Crypto Breaking News

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