According to a recent report by Chainalysis, the total value of cryptocurrency laundered in 2023 amounted to just over $22 billion, reflecting a 30% decline from the previous year. While part of this decrease can be attributed to a drop in overall crypto transaction volumes, which only saw a 15% decrease, nefarious actors are also adapting their techniques to evade detection by investigators.
Centralized exchanges continue to be the primary destination for funds from illicit addresses, a trend that has persisted for the past five years. However, the report highlights a growing share of funds being sent to decentralized finance (DeFi) protocols. Despite their increasing popularity, DeFi protocols are not ideal for money laundering due to their transparency.
One notable shift in tactics identified by Chainalysis is the increased use of a new Bitcoin mixer called YoMix, following the takedown of Sinbad. The report suggests that the Lazarus Group, a North Korean cybercriminal organization, may be using YoMix to launder funds, with inflows growing significantly in 2023. However, the total value of funds going to mixers saw a significant decrease, dropping from $1 billion in 2022 to just $504 million in 2023.
Another trend observed by Chainalysis is the rise in the use of cross-chain bridges, which allow users to transfer funds between different blockchains. In 2023, bridge protocols received $744 million from illicit addresses, more than double the amount received in 2022. The report emphasizes that blockchain analysts can still trace these funds, providing a potential avenue for law enforcement and compliance teams to combat illicit activities.
In conclusion, the report underscores the importance of staying informed about evolving money laundering strategies employed by crypto criminals. By studying these new tactics and familiarizing themselves with on-chain patterns associated with them, law enforcement and compliance teams can enhance their effectiveness in combating illicit activities in the cryptocurrency space.