Crypto Money Laundering Rises 30 In 2021 -Chainalysis

By Gertrude Chavez-Dreyfuss

NEW YORK, Jan 26 (Reuters) - Cybercriminals laundered $8.6 billion in cryptocurrencies last year, up 30% from 2020, according to a report from blockchain analysis firm Chainalysis released on Wednesday.

Overall, darknet market markets links cybercriminals have laundered more than $33 billion worth of crypto since 2017, Chainalysis estimated, with most of the total over time moving to centralized exchanges.

The firm said the sharp rise in money laundering activity in 2021 was not surprising, given the significant growth of both legitimate and illegal crypto activity last year.

Money laundering refers to that process of disguising the origin of illegally obtained money by transferring it to legitimate businesses.

About 17% of the $8.6 billion laundered went to decentralized finance applications, darknet markets links Chainalysis said, referring to the sector dark market link which facilitates crypto-denominated financial transactions outside of traditional banks.

That was up from 2% in 2020.

Mining pools, high-risk exchanges, and darknet market darknet markets url links mixers also saw substantial increases in value received from illicit addresses, the report said.

Mixers typically combine potentially identifiable or tainted cryptocurrency funds with others, dark web sites so as to conceal the trail to the fund's original source.

Wallet addresses associated with theft sent just under half of their stolen funds, or more than $750 million worth of crypto in total, 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 crime such as darknet market sales or ransomware attacks in which profits are in crypto instead of fiat currencies.

"It's more difficult to measure how much fiat currency derived from off-line crime - traditional drug trafficking, for example - is converted into cryptocurrency to be laundered," Chainalysis said in the report.

"However, we know anecdotally this is happening." (Reporting by Gertrude Chavez-Dreyfuss; Editing by Himani Sarkar)