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While the good players in the cryptocurrency space channel their creativity into creating new things, the bad players use the same energy to come up with more creative ways to hide their ill-gotten gains.
A new report from analytics firm Chainalysis shows how wallets involved in ransomware attacks are turning to cryptocurrency mining pools to launder funds obtained through exploits.
According to the firm, a very active wallet address, which it called a “master exchange,” received funds from ransomware-related wallets and mining pools. The deposit address received nearly $100 million in digital assets, of which $19.1 million came from ransomware addresses and $14.1 million from mining pools.
The graph shows a complex attempt to launder funds through mining pools. According to Chainalysis, the ransomware sent funds to the exchange via a mining pool. By doing so, they can “avoid triggering compliance alarms” within the exchange.
In this case, the mining pool acts as a cryptocurrency mixer and makes the origin of the funds unclear. This creates a smoke screen, leading observers to believe that the funds are earned through mining, and not through a ransomware attack.
Related: Binance launches Bitcoin mining cloud services amid US SEC crackdown
The value sent from ransomware wallets to mining pools has increased, according to the analytics firm. In one case, Chainalysis highlighted that since 2018, an exchange wallet address has received $158.3 million from ransomware addresses.
While this problem seems like a huge headache for the cryptocurrency space, Chainalysis suggested that it could be solved with mining pools applying a more comprehensive wallet verification process in addition to Know Your Customer measures and rejecting funds coming from illegal addresses.