According to a recent Chainalysis report, criminals are improving their money laundering methods using cryptocurrencies, making it increasingly difficult for law enforcement agencies to combat them.
Chainalysis analysts found that since 2019, about $100 billion was transferred from crypto wallets identified as being linked to illicit activity to various services that provide conversion of digital assets into fiat funds.
According to the Chainalysis report, criminals are improving their money laundering methods using cryptocurrencies and it’s becoming increasingly difficult for law enforcement agencies to track such transactions. One of the most common methods that complicate the tracking of funds’ origins and movements is the use of so-called hops, i.e. intermediate wallets. Chainalysis analysts report that more than 80% of the total amount of laundered assets passes through intermediate wallets.
The report notes that the process is also made more complicated by the use of stablecoins such as USDT by criminals. In such situations, issuers of stablecoins may freeze assets at the request of law enforcement, but this fact doesn’t affect the popularity of stablecoins among criminals — they often manage to successfully hide illegally obtained funds using intermediate wallets. Money laundering is also complicated by the use of crypto mixers and privacy-enhanced cryptocurrencies, the popularity of which is actively growing despite bans and regulatory attempts.
Analysts also said that most of the illicit funds after laundering end up in centralized crypto exchanges. This trend is directly related to the fact that more than 50% of CEXs are integrated with the traditional financial system and have high liquidity. At the same time, Chainalysis analysts noted a significant decrease in the amount of funds related to illegal activities and received by centralized exchanges, indicating an improvement in anti-money laundering programs.
In 2023, the volume of illegal crypto transactions amounted to $24.2 billion and about 60% of this amount was accounted for by stablecoins. It was revealed that for money laundering criminals most actively use the blockchain network TRON, through dubious addresses in which for a year and a half was laundered about $64.25 billion in stablecoins.
