Chainalysis: Cryptocurrencies - increasingly used for money laundering

Money launderers are increasingly using cryptocurrencies to hide the origins and movements of ill-gotten funds, according to a report by Chainalysis, CNBC writes.

According to the report, which studied new trends and ways of money laundering, the crypto area is used for crimes such as drug trafficking and fraud, because crypto tools are "cross-border, transactions are generally cheap and are done virtually instantly."

"The growing ubiquity of crypto has made it a tool for laundering the proceeds of various non-blockchain crimes, such as drug trafficking and fraud. In 2024, money laundering using crypto encompasses all crimes - not just those inherently related to the crypto ecosystem," the blockchain analytics firm wrote in a report published this month, according to CNBC.

This situation manifests itself in the context in which the price of Bitcoin, the world's most famous cryptocurrency, appreciated by more than 50% this year.

According to the mentioned source, money launderers use various methods, such as "crypto mixers", "cross bridges" and "hops between wallets", to hide the flows of funds.

"Crypto mixers" involve combining crypto instruments from various sources to make it difficult to detect their origin and ownership. Also, so-called "crypto bridges" are used, which involve moving tools between different blockchain networks. The "hops" involve moving funds between several intermediate personal wallets, to make it difficult to detect the origin and movement of the instruments, writes CNBC.

According to Chainalysis data, since 2019, funds amounting to almost $100 billion have been transferred from wallets used for illicit activities to conversion services - where crypto instruments are converted into fiat currency. The largest amount identified was 30 billion dollars, in the year 2022. A good part of the money was converted through the Garantex exchange in Russia, according to the mentioned source.

But, money laundering through crypto tools can be identified and tracked with greater accuracy and speed than in traditional financial systems, thanks to the transparency of the blockchain. However, crypto money laundering is expected to become more widespread, according to the Chainalysis report.

"As cryptocurrencies become more globally accepted and barriers to entry lower, Chainalysis expects this method of money laundering to become more widespread, as criminals have historically been proven to co-opt new technologies to achieve their goals ," the blockchain analytics firm wrote in the report, according to CNBC.