Cryptography Money Laundering Tactics Evolve Amid Increased Law Enforcement Scrutiny
In recent years, cryptocurrency exchanges have witnessed a significant shift in money laundering tactics. Sophisticated cybercriminals are continually adapting their methods to evade detection by law enforcement and exchange compliance teams.
Trends in Cryptocurrency Money Laundering
According to Chainalysis, a leading blockchain analysis firm, the number of exchange deposit addresses receiving over $10 million worth of illicit cryptocurrency has increased, while the concentration of money laundering activity at the service level has decreased. This trend suggests that crypto criminals are diversifying their money laundering activities across more nested services or deposit addresses to conceal them from law enforcement and exchange compliance teams.
Increased Use of Bridges and Mixers
One notable development is the increased use of bridges and mixers by sophisticated cybercriminals. For instance, a new mixer called YoMix has emerged as a replacement for Sinbad, which was shut down by law enforcement last year. YoMix saw significant growth in 2023, with inflows increasing by over five times compared to the previous year.
Cross-Chain Bridging
Another tactic used by illicit actors is cross-chain bridging, which allows them to move funds from one blockchain to another. This method has become particularly popular among crypto thieves, with bridge protocols receiving $743.8 million in cryptocurrency from illicit addresses in 2023, up from $312.2 million in 2022.
Differing Money Laundering Tactics by Criminal Type
The report also notes that money laundering tactics differ by criminal type, with CSAM vendors and ransomware operators showing high concentration, while scams and darknet markets displaying less concentration. This may indicate that these forms of crypto crime are more vulnerable to law enforcement disruption.
Conclusion
Law enforcement and compliance teams must stay vigilant and adapt to these evolving tactics in order to effectively combat cryptocurrency money laundering. As the report concludes, “the most sophisticated illicit actors are always adapting their money laundering strategy and exploiting new kinds of crypto services.”
Key Takeaways:
- The number of exchange deposit addresses receiving over $10 million worth of illicit cryptocurrency has increased.
- Sophisticated cybercriminals are diversifying their money laundering activities across more nested services or deposit addresses.
- Bridges and mixers are becoming increasingly popular among crypto criminals.
- Cross-chain bridging is a popular method for moving funds from one blockchain to another.
- Money laundering tactics differ by criminal type, with some forms of crypto crime being more vulnerable to law enforcement disruption.