NEW YORK — Cybercriminals laundered $8.6 billion worth of cryptocurrencies last year, a 30 percent increase from 2020, according to a report by blockchain analytics firm Chainalysis released Wednesday (Jan. 26).
Overall, cybercriminals have laundered more than $33 billion worth of crypto since 2017, Chainalysis estimates, with most of the total moving to centralized exchanges over time.
The company said the sharp rise in money laundering activities in 2021 is not surprising given the significant surge in both legitimate and illicit crypto activities over the past year.
Money laundering refers to the process of disguising the origin of illegally obtained money by transferring it to legitimate businesses.
About 17 percent of the $8.6 billion laundered went to decentralized finance applications, Chainalysis said, referring to the sector that facilitates crypto-denominated financial transactions outside of traditional banks.
That was an increase of 2 percent in 2020.
Mining pools, high-risk exchanges and mixers also saw significant gains in value received from illicit addresses, the report said. Shufflers typically combine potentially identifiable or tainted cryptocurrency funds with others to obscure traces of the funds’ original source.
Wallet addresses linked to theft have sent just under half of their stolen funds or cryptos, totaling more than $750 million, to decentralized finance platforms, according to the Chainalysis report.
Chainalysis also clarified that the $8.6 billion laundered last year represents funds derived from crypto-native crimes such as sales on the dark web market or ransomware attacks, where profits are in crypto instead of fiat. currencies are achieved.
“It’s more difficult to measure how much fiat currency from offline crime — traditional drug dealing, for example — is converted into cryptocurrency to be laundered,” Chainalysis said in the report.
“However, we know anecdotally that this happens.”