A new report by Chainalysis has revealed that $8.6 billion was laundered using cryptocurrencies in 2021. This is 25% more than in 2020, but still well below the maximum level reached in 2019.
That year, $10.9 billion was laundered through cryptocurrency. Chainalysis estimates that a total of $33.4 billion in crypto has been laundered since 2017.
Chainalysis notes that the $33.4 billion in crypto laundered since 2017 pales in comparison to the roughly $2 trillion in fiat laundered each year through offline crimes such as drug trafficking. However, a reliable estimate of the amount of laundered fiat is more difficult to determine than cryptocurrency due to the use of untraceable cash in offline crimes. The report says:
“The biggest difference between fiat-based money laundering and crypto-based money laundering is that the inherent transparency of blockchains makes it easier for us to track how criminals move crypto between wallets and services in their attempts to convert their funds into cash.”
According to a cybersecurity analytics provider, the value of the laundered cryptocurrency was derived from “crypto-crimes,” in which “profits are almost always made in crypto rather than fiat.”
For the first time since 2018, centralized exchanges (CEXs) accounted for less than half (47%) of the laundered funds, indicating a potential change in the behavior of cybercriminals. The use of DeFi protocols for illegal addresses has increased by almost 2000% from 2% in 2020 to 17% in 2021.
Hackers, such as the infamous North Koreans who stole around $400 million, strongly preferred DeFi, while scammers tended to prefer CEX, which Chainalysis attributes to a “relative lack of sophistication.”
Chainalysis stated, “Mining pools, high-risk exchanges and mixers have also significantly increased the value obtained from illegal addresses.”
Of the funds laundered in 2021, the top five laundering services received a larger share (58%) in 2021 than in 2020 (54%). However, the overall concentration of money laundering decreased in 2021 as 583 addresses received deposits of at least $1 million, compared to 270 such addresses in 2020.
Related: The overall impact of cryptocurrency crime will drop even further in 2022: Chainalysis
In terms of assets, altcoins experienced the most concentration as 68% of those laundered went to the top 20 deposit addresses used for illegal activities. Ethereum (ETH) was next at 63%, stablecoins at 57%, and Bitcoin (BTC) was the least concentrated with only 19% going to the top addresses.
A new report by Chainalysis has revealed that $8.6 billion was laundered using cryptocurrencies in 2021. This is 25% more than in 2020, but still well below the maximum level reached in 2019.
That year, $10.9 billion was laundered through cryptocurrency. Chainalysis estimates that a total of $33.4 billion in crypto has been laundered since 2017.
Chainalysis notes that the $33.4 billion in crypto laundered since 2017 pales in comparison to the roughly $2 trillion in fiat laundered each year through offline crimes such as drug trafficking. However, a reliable estimate of the amount of laundered fiat is more difficult to determine than cryptocurrency due to the use of untraceable cash in offline crimes. The report says:
“The biggest difference between fiat-based money laundering and crypto-based money laundering is that the inherent transparency of blockchains makes it easier for us to track how criminals move crypto between wallets and services in their attempts to convert their funds into cash.”
According to a cybersecurity analytics provider, the value of the laundered cryptocurrency was derived from “crypto-crimes,” in which “profits are almost always made in crypto rather than fiat.”
For the first time since 2018, centralized exchanges (CEXs) accounted for less than half (47%) of the laundered funds, indicating a potential change in the behavior of cybercriminals. The use of DeFi protocols for illegal addresses has increased by almost 2000% from 2% in 2020 to 17% in 2021.
Hackers, such as the infamous North Koreans who stole around $400 million, strongly preferred DeFi, while scammers tended to prefer CEX, which Chainalysis attributes to a “relative lack of sophistication.”
Chainalysis stated, “Mining pools, high-risk exchanges and mixers have also significantly increased the value obtained from illegal addresses.”
Of the funds laundered in 2021, the top five laundering services received a larger share (58%) in 2021 than in 2020 (54%). However, the overall concentration of money laundering decreased in 2021 as 583 addresses received deposits of at least $1 million, compared to 270 such addresses in 2020.
Related: The overall impact of cryptocurrency crime will drop even further in 2022: Chainalysis
In terms of assets, altcoins experienced the most concentration as 68% of those laundered went to the top 20 deposit addresses used for illegal activities. Ethereum (ETH) was next at 63%, stablecoins at 57%, and Bitcoin (BTC) was the least concentrated with only 19% going to the top addresses.
