Cryptocurrencies are increasingly used for money laundering, says Chainaanalysis | Wilnesh News

Cryptocurrencies are increasingly used by money launderers to conceal the origin and flow of illicit funds, According to a report by Chainaanalysis.

The report, which examines trends and new ways of laundering money, said cryptocurrencies are being used for off-chain crimes such as drug trafficking and fraud because cryptocurrencies are “cross-border, nearly instantaneous, and often have low transaction costs.”

“The growing popularity of cryptocurrencies makes them a vehicle for laundering the proceeds of a variety of off-chain crimes, such as drug trafficking and fraud. By 2024, crypto money laundering encompasses all crimes, not just those inherently associated with the cryptocurrency ecosystem Criminal behavior,” the blockchain analytics firm said in a July report.

According to LSEG, the value of Bitcoin, the world’s largest cryptocurrency, has risen by nearly 55% so far this year.

Money launderers use a variety of methods including cryptocurrency mixers, cross-chain bridges, and “hopping” between wallets to hide the flow of funds.

Cryptocurrency mixers or tumblers involve mixing cryptocurrencies from different sources, making it difficult to detect their origin and ownership. Bad actors also use crypto bridges to hide the origin of funds by moving them between different blockchain networks.

“Jumping” involves moving funds between numerous intermediary individual wallets to avoid detection.

Chainaanalysis data shows that since 2019, nearly $100 billion has been transferred from known illicit wallets to conversion services, where cryptocurrencies are converted into fiat currencies. The maximum amount set for 2022 is $30 billion.

Sanctioned Russian Cryptocurrency Exchange Garantex The record amount is largely behind the fact that its services provide money launderers with a way to convert illegally obtained cryptocurrencies into cash.

But Chainaanalysis said these illegal activities can still be traced.

Due to the transparency of blockchain, cryptocurrency laundering can be tracked and analyzed with greater accuracy and speed compared to traditional financial systems. Cryptocurrency money laundering is expected to become more common, the report said.

The blockchain analytics firm said: “As global acceptance of cryptocurrencies continues to increase and barriers to entry continue to lower, Chainaanalysis expects this type of money laundering to become more severe, as illicit actors have historically adopt new technologies for the purpose.