Crypto money laundering up by one third in 2021 but still below record
A new Chainalysis report has revealed that $8.6 billion in value was laundered through cryptocurrency in 2021. It marks a 25% increase from 2020, but still remains well below the high watermark hit in 2019.
That year $10.9 billion in value was laundered via cryptocurrency. Since 2017, Chainalysis estimates that a total of $33.4 billion in crypto has been laundered.
Chainalysis points out the $33.4 billion in crypto laundered since 2017 pales in comparison to the estimated $2 trillion in fiat is laundered yearly from offline crimes such as drug trafficking. However, a reliable assessment of the amount of fiat laundered is more difficult to determine than crypto due to the use of untraceable cash in offline crimes. The report states:
According to the cybersecurity analytics provider the value of the laundered crypto was derived from “crypto-native crimes” in which “profits are virtually always derived in cryptocurrency rather than fiat currency.”
For the first time since 2018, centralized exchanges (CEX) accounted for less than half (47%) of the value laundered, signalling a potential change in cyber criminals’ behavior. DeFi protocols saw their utility for illicit addresses increase nearly 2,000% from a 2% share in 2020 to 17% in 2021.
Hackers, such as the infamous North Koreans who stole about $400 million, strongly preferred DeFi while scammers tended to prefer CEX, which Chainalysis attributes to a “relative lack of sophistication.”
Chainalysis said, “Mining pools, high-risk exchanges, and mixers also saw substantial increases in value received from illicit addresses as well.”
Of the funds laundered in 2021, a greater proportion arrived at the top-five laundering services in 2021 (58%) than in 2020 (54%). The overall
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