Crypto Money Laundering Increases 30% in 2021 – Chainalysis

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By Gertrude Chavez-Dreyfuss

NEW YORK (Reuters) – Cybercriminals laundered $8.6 billion worth of cryptocurrencies last year, up 30% from 2020, according to a report by blockchain analytics firm Chainalysis released on Wednesday.

Overall, cybercriminals have laundered more than $33 billion worth of crypto since 2017, according to Chainalysis, with most of the total moving over time to centralized exchanges.

The company said the sharp increase in money laundering activity in 2021 was not surprising, given the significant growth in both legitimate and illegal crypto activity over the past year.

Money laundering refers to this process of concealing the origin of illegally obtained money by transferring it to legitimate businesses.

About 17% of the $8.6 billion laundered went to decentralized financial apps, Chainalysis said, referring to the industry that facilitates crypto-denominated financial transactions outside of traditional banks.

That was up from 2% in 2020.

Mining pools, high-risk exchanges and mixers also saw substantial increases in the value received from illicit addresses, according to the report. Mixers typically combine potentially identifiable or contaminated cryptocurrency funds with others in a way that conceals the trail to the original source of the fund.

According to the Chainalysis report, the wallet addresses associated with the theft sent just under half of their stolen funds, or more than $750 million worth of crypto in total, to decentralized finance platforms.

Chainalysis also clarified that the $8.6 billion laundered last year represents funds from crypto-native crimes such as darknet market sales or ransomware attacks in which profits are in crypto instead of money. fiat currencies.

“It is more difficult to measure the amount of fiat currency derived from offline crime – traditional drug trafficking, for example – that is converted into cryptocurrency to be laundered,” Chainalysis said in the report.

“However, we know it happens anecdotally.”

(Reporting by Gertrude Chavez-Dreyfuss; Editing by Himani Sarkar)

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