A Chainanalysis report says that cryptocurrency worth $8.6 billion was used to launder money in 2021. The amount is an increase of 25% when compared to 2020 data, but lower than 2019, when $10.9 billion was laundered through cryptocurrency. According to the estimates of Chainanalysis, up to $33.4 billion worth of cryptos have been laundered since 2017.
Less Crypto Laundering
Chainanalysis says that $33.4 billion of crypto value laundered since the year 2017 is a lot less than $2 trillion estimated yearly laundering of fiat money through offline crimes like drug trafficking. At the same time, it is not possible to accurately assess the laundered fiat money because many laundering transactions take place in cash. These deals are difficult to trace, unlike the crypto, where everything is under record and visible to others. The report says that a high level of blockchain transparency means any laundering using cryptocurrency can be tracked quickly and easily. Criminals trying to convert cryptocurrency into cash go through wallets and blockchain services. It leaves a trail of footprints across several nodes and cannot be hidden completely.
Profits from Cryptocurrency
According to Chainanalysis, the value laundered through crypto relates to crypto-native crimes where profits are obtained from cryptocurrency and not fiat currency. Data collected since 2018 shows that centralized exchanges have been only half responsible for the laundered value, indicating a change in the behavior of cybercriminals. The share of DeFi protocols in these illicit transactions increased by 2000%. Their share in these transactions was only 2%, but in 2021, it reached 17%.
Hackers have preferred DeFi, as was clear from $400 million stolen by some North Koreans. On the other hand, scammers have preferred central exchanges due to the poor sophistication of these systems, according to Chainanalysis.
