Ransomware Affiliate Moves Millions in Cryptocurrency Through Underground Money Laundering Service
A recent analysis by Chainalysis has uncovered a sophisticated underground money laundering service that facilitated the movement of millions of dollars’ worth of cryptocurrency, believed to be controlled by the laundering service itself. The investigation revealed that an affiliate of a prominent ransomware strain used this service to move funds from their wallet to a deposit address at a large, centralized exchange.
Underground Money Laundering Service
The study found that criminal actors are using underground money laundering services to conceal their illicit activities. These services facilitate the movement of cryptocurrency between wallets, making it difficult for law enforcement agencies to track and seize illegal funds.
Growth in Cryptocurrency Movement
The total value of cryptocurrency moving through wallets associated with these services has grown significantly over the past few years, reaching $6 billion in 2022. While not all of these wallets may be directly linked to illegal activity, their on-chain behavior suggests a strong likelihood of involvement.
Decline in Criminal Balances
Criminal balances, which represent a lower-bound estimate of cryptocurrency that could potentially be seized by law enforcement, have plummeted in value from $12 billion at the end of 2021 to just $2.9 billion in 2022. This decline is likely due to the ongoing bear market and large-scale seizures by law enforcement.
Stolen Funds Dominating On-Chain Criminal Balances
Notably, stolen funds dominate on-chain criminal balances, with many hackers choosing to leave their ill-gotten gains sitting in personal wallets rather than attempting to move them to fiat off-ramps. This could be due to the increased scrutiny and public tracking of these addresses.
Importance of Monitoring Underground Money Laundering Services
The Chainalysis report highlights the importance of monitoring underground money laundering services and tracking criminal balances to identify opportunities for successful seizures by law enforcement agencies. The study also underscores the transparency of blockchain technology, which provides a unique window into illegal activity that can inform law enforcement strategies.
Notable Seizures in 2022
- A record $3.6 billion seized from two individuals accused of laundering funds stolen in the 2016 hack of Bitfinex
- $3.36 billion in Bitcoin seized from darknet market Silk Road
- $30 million worth of cryptocurrency stolen from Axie Infinity’s Ronin Bridge, marking the first successful seizure of cryptocurrency stolen by North Korean hacking syndicate Lazarus Group
Conclusion
As law enforcement agencies continue to ramp up their efforts to seize cryptocurrency from criminals, these findings suggest that there are still many opportunities for successful seizures and a crucial difference between financial investigations in cryptocurrency versus fiat.