Crypto currency laundering rises, reports


According to a survey by blockchain intelligence company Chainalysis. criminals laundered $8.6 billion (£6.4 billion) in bitcoin in 2021, up 30% from the previous year.

It claims that targeting key services used by criminals to launder cryptocurrency might deal a “huge blow” to law enforcement.

Criminals will obtain a record $14 billion in cryptocurrencies in 2021.

The National Crime Agency (NCA) of the UK stated that law enforcement agencies are reacting.

Cryptocurrency wallets are controlled by criminals. Such as ransomware attackers, malware operators, scammers, human traffickers, darknet market operators. Terrorist groups are tracked by Chainalysis, according to the company.

Chainalysis estimated the amount “laundered” by tracing cryptocurrency transactions from addresses linked to criminal activity.

It claims that most cryptocurrency is laundered through a small number of businesses. Such as specific exchanges used by criminals. That shutting these down would have a significant impact.

“While billions of dollars worth of bitcoin flow from unlawful addresses every year. The vast majority of it ends up at a shockingly tiny collection of services. Many of which appear purpose-built for money laundering,”.

Criminal networks specializing in large-scale money laundering “have adopted cryptocurrency. They are providing their services to other criminals,” a Europol investigation released on Wednesday.

“While the vast majority of cryptocurrency use and trade is for legal reasons. Organized criminals have discovered the benefits that cryptocurrency gives them,” said Gary Cathcart, head of the financial investigation at the NCA.

Low transaction cost

According to Chainalysis, the total amount laundered in 2019 is less than the 5-year high of $10.9 billion.

According to Europol, the usage of cryptocurrencies in money laundering schemes has been increasing. Many criminal networks used cryptocurrencies as a payment medium during the Covid-19 outbreak.

Only ransomware assaults where criminals are paid in cryptocurrencies are included in the Chainalysis numbers.

Money from offline crime, such as drug trafficking funds converted to cryptocurrencies to be laundered. It is not covered. The report warns that this could be a growing area.

 It uses the example of a criminal gang. They supplied drugs to street-level traffickers in northern England, who then sold them for cash.

A courier would collect the money from the dealers and transport it to a broker. They would arrange for it to be converted into Bitcoin. They sent to the crime group’s selected address for a fee of 4%.

The paper claims that this is low compared to more traditional ways of money laundering. “suggesting that Bitcoin-based laundering could become increasingly attractive to traditional criminals.”

Tactics change

Criminals’ behavior could also be observed using Chainalysis.

According to the research, so-called “decentralized finance” (Defi) protocols have become more essential to criminals attempting to conceal cash. Defi collects 17% of all monies moved from unlawful wallets in 2021. up from 2% the previous year.

Several of these Defi protocols allow for speedy switching between different cryptocurrencies, appealing to money launderers.

 For Ex, they were commonly utilized by North Korean-affiliated hackers responsible for $400 million in bitcoin hacks last year.

According to Paul Radu, head of the Organized Crime and Corruption Reporting Project. Criminals are “usually early adopters of technology, and they embraced cryptocurrency a decade ago.”

Published By: Khushboo Mehta

Edited By: Kritika Kashyap






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