{"id":213140,"date":"2022-01-26T18:00:02","date_gmt":"2022-01-26T18:00:02","guid":{"rendered":"https:\/\/cryptoslate.com\/?p=213140"},"modified":"2022-01-26T20:32:20","modified_gmt":"2022-01-26T20:32:20","slug":"money-laundering-0-05-of-all-crypto-transactions-in-2021-chainalysis-report","status":"publish","type":"post","link":"https:\/\/cryptoslate.com\/money-laundering-0-05-of-all-crypto-transactions-in-2021-chainalysis-report\/","title":{"rendered":"Money laundering 0.05% of all crypto transactions in 2021: Chainalysis report"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Every year since 2017, blockchain analysis company <\/span><a href=\"https:\/\/cryptoslate.com\/companies\/chainalysis\/\"><span style=\"font-weight: 400;\">Chainalysis<\/span><\/a><span style=\"font-weight: 400;\"> publishes a report focusing on money laundering and illicit transactions going through the cryptocurrency ecosystem. This year's report <\/span><a href=\"https:\/\/blog.chainalysis.com\/reports\/2022-crypto-crime-report-preview-cryptocurrency-money-laundering\/\"><span style=\"font-weight: 400;\">summary<\/span><\/a><span style=\"font-weight: 400;\"> shows that while the total amount of laundered money increased by 30%, only a small fraction of all transactions come from illicit activities.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">As per the report, cybercriminals dealing in cryptocurrency share one common goal: Move their ill-gotten funds to a service where they can be kept safe from the authorities and eventually converted to cash. That\u2019s why money laundering underpins all other forms of cryptocurrency-based crime.<\/span><\/p>\n<h2><strong>Nominal 30% increase from 2020<\/strong><\/h2>\n<p><span style=\"font-weight: 400;\">Cybercriminals laundered $8.6 billion worth of cryptocurrency in 2021, a 30% increase from 2020, going by the amount of cryptocurrency sent from illicit addresses to addresses hosted by services.<\/span><\/p>\n<figure id=\"attachment_213143\" aria-describedby=\"caption-attachment-213143\" style=\"width: 1024px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-213143 size-large\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/01\/Total-cryptocurrency-laundered-by-year-1024x690.png\" alt=\"Total cryptocurrency laundered by year\" width=\"1024\" height=\"690\" srcset=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/01\/Total-cryptocurrency-laundered-by-year-1024x690.png 1024w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/01\/Total-cryptocurrency-laundered-by-year-300x202.png 300w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/01\/Total-cryptocurrency-laundered-by-year-768x518.png 768w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/01\/Total-cryptocurrency-laundered-by-year.png 1424w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption id=\"caption-attachment-213143\" class=\"wp-caption-text\">Total cryptocurrency laundered by year (source: Chainalysis)<\/figcaption><\/figure>\n<p><span style=\"font-weight: 400;\">Despite this, money laundering accounted for just 0.05% of all cryptocurrency transaction volume in 2021, compared to the amount of laundered fiat currency \u2013 5%\u2013 that makes up global GDP. This highlights that money laundering is a plague on virtually all forms of economic value transfer.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Money laundering activity in cryptocurrency is also heavily concentrated. While billions of dollars\u2019 worth of cryptocurrency moves from illicit addresses every year, most of it ends up at a surprisingly small group of services, many of which appear purpose-built for money laundering based on their transaction histories.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Law enforcement can strike a huge blow against cryptocurrency-based crime and significantly hamper criminals\u2019 ability to access their digital assets by disrupting these services.\u00a0<\/span><\/p>\n<h2><strong>DeFi is playing a bigger role<\/strong><\/h2>\n<p><span style=\"font-weight: 400;\">Though the overall percentage of illicit transactions are low, <\/span><a href=\"https:\/\/cryptoslate.com\/defi\/\"><span style=\"font-weight: 400;\">DeFi<\/span><\/a><span style=\"font-weight: 400;\"> is increasingly playing a bigger role in money laundering, with decentralized protocols receiving 17% of all funds sent from illicit wallets in 2021, up from 2% the previous year. This translates to a 1,964% year-over-year increase in total value received by DeFi protocols from illicit addresses. Centralized protocols remain more popular, taking in 47% of funds from illicit addresses.<\/span><\/p>\n<figure id=\"attachment_213142\" aria-describedby=\"caption-attachment-213142\" style=\"width: 1024px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-213142 size-large\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/01\/year-over-year-procentage-growth-in-value-1024x651.png\" alt=\"Year over year percentage growth in value\" width=\"1024\" height=\"651\" srcset=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/01\/year-over-year-procentage-growth-in-value-1024x651.png 1024w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/01\/year-over-year-procentage-growth-in-value-300x191.png 300w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/01\/year-over-year-procentage-growth-in-value-768x488.png 768w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/01\/year-over-year-procentage-growth-in-value.png 1494w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption id=\"caption-attachment-213142\" class=\"wp-caption-text\">Year over year percentage growth in value (source: Chainalysis)<\/figcaption><\/figure>\n<p><span style=\"font-weight: 400;\">Overall, going by the amount of cryptocurrency sent from illicit addresses to addresses hosted by services, cybercriminals laundered $8.6 billion worth of cryptocurrency in 2021. That represents a 30% increase in money laundering activity over 2020, though such an increase is unsurprising given the significant growth of both legitimate and illicit cryptocurrency activity in 2021.<\/span><\/p>\n<h2><strong>Fiat money laundering 5% of global GDP<\/strong><\/h2>\n<p><span style=\"font-weight: 400;\">Cybercriminals have laundered over $33 billion worth of cryptocurrency since 2017, with most of the total over time moving to centralized exchanges. For comparison, the UN Office of Drugs and Crime <\/span><a href=\"https:\/\/www.unodc.org\/unodc\/en\/money-laundering\/overview.html\"><span style=\"font-weight: 400;\">estimates<\/span><\/a><span style=\"font-weight: 400;\"> that between $800 billion and $2 trillion of fiat currency is laundered each year \u2014 as much as 5% of global GDP.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Addresses associated with theft sent just under half of their stolen funds to DeFi platforms \u2013 over $750 million worth of cryptocurrency in total. North Korea-affiliated hackers in particular, who were responsible for $400 million worth of cryptocurrency <\/span><a href=\"https:\/\/cryptoslate.com\/hacks\/\"><span style=\"font-weight: 400;\">hacks<\/span><\/a><span style=\"font-weight: 400;\"> last year, used DeFi protocols for money laundering quite a bit.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This may be related to the fact that more cryptocurrency was stolen from DeFi protocols than any other type of platform last year. Chainalysis also sees a substantial amount of mixer usage in the laundering of stolen funds.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Scammers, on the other hand, send the majority of their funds to addresses at centralized exchanges. This may reflect scammers\u2019 relative lack of sophistication.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Every year since 2017, blockchain analysis company Chainalysis publishes a report focusing on money laundering and illicit transactions going through the cryptocurrency ecosystem. This year&#8217;s report summary shows that while the total amount of laundered money increased by 30%, only a small fraction of all transactions come from illicit activities.\u00a0 As per the report, cybercriminals [&hellip;]<\/p>\n","protected":false},"author":962,"featured_media":213141,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[120,76799,46940,16041,60793,11],"tags":[77012,77304,76325,77306,77305],"post_folder":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v21.9 (Yoast SEO v21.9.1) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Money laundering 0.05% of all crypto transactions in 2021: Chainalysis report<\/title>\n<meta name=\"description\" content=\"Of all cryptocurrency transactions in 2021, a mere 0.05% can be associated with money laundering. 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