Chainalysis 2023 Crypto Crime Report: Key Findings and Takeaways

Money Laundering Trends

Decrease in Concentration

In 2023, money laundering activity became less concentrated at the deposit address level. This is evident from the fact that more addresses received smaller amounts of illicit funds.

Concentration by Criminal Type

While some types of crypto crimes show high concentration, others exhibit low concentration:

• CSAM vendors and ransomware operators: Show a high degree of concentration.
• Scams and darknet markets: Exhibit low concentration.

Diffusion of Money Laundering Activity

Crypto criminals may be diversifying their money laundering activity across more nested services or deposit addresses to conceal it from law enforcement.

Money Laundering Tactics

Unsophisticated Methods

Many bad actors still use direct transfers to exchanges, but…

Sophisticated Tactics

Sophisticated cybercriminals like Lazarus Group are using a variety of crypto services and protocols, including:

• Mixers: After Sinbad’s takedown, YoMix has become the preferred mixer for North Korea-affiliated hackers.
• Cross-chain bridges: Illicit actors are using bridge protocols to move funds between blockchains, making it harder to track.

Key Takeaways

1. Sophisticated crypto criminals are always adapting their money laundering strategy and exploiting new kinds of crypto services.
2. Law enforcement and compliance teams must study these new laundering methods and become familiar with the on-chain patterns associated with them.
3. The use of cross-chain bridges is becoming more popular among illicit actors, making it harder to track funds.

Overall, the report highlights the evolving nature of money laundering in the cryptocurrency space and the need for law enforcement and compliance teams to stay ahead of these tactics.