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Cybercriminals laundered over $20 million worth of crypto daily in 2021

Cybercriminals laundered over $20 million worth of crypto daily in 2021
Justinas
Baltrusaitis
4 months ago
3 mins read

With the cryptocurrency market recording significant growth in 2021, cybercriminals used the opportunity to launder a significant amount of money in different digital currencies. 

In 2021, cybercriminals laundered $8.6 billion translating to $23.5 million daily, data provided by Chainalysis indicates.

The amount increased 30% from 2020’s figure of $6.6 billion. Over the last five years, the highest amount of money laundered was recorded in 2019 at $10.9 billion worth of cryptocurrencies.

Over the same period, cybercriminals have laundered a total of $33 billion. The report noted that the amount does not factor in other criminal proceeds like ransomware. 

Value of cryptocurrency laundered between 2017 and 2021. Source: Chainalysis.

​​Additionally, the report highlighted that all the money laundering in 2021 accounted for just 0.05% of all cryptocurrency transaction volume. 

During the year, decentralized finance (DeFi) platforms also recorded significant growth, and the report highlights the sector’s role in laundering. 

Notably, addresses linked with the theft sent almost half of their stolen funds to DeFi platforms at over $750 million worth of cryptocurrency. 

Furthermore, hackers from North Korea who have been at the center of $400 million worth of cryptocurrency hacks in 2021 used DeFi protocols for money laundering.

Elsewhere, most scammers utilized centralized crypto exchanges to transact the ill-gotten funds. 

“However, money laundering activity is better viewed at the deposit address level rather than the service level. The reason for that is that many of the money laundering services cybercriminals are nested services, meaning they operate using addresses hosted by larger services to tap into those larger services’ liquidity and trading pairs,” the report said. 

The funds were directed to other illegal activities like terrorism financing, ransomware, child abuse materials, among others. 

Focus on crypto regulations 

The report’s findings will likely reignite the debate on the crypto regulations expected to take center stage in 2022. 

Notably, in recent years crypto critics have maintained that there should be strict regulations for the sector, citing associated vices like money laundering and terrorism financing.

With crypto exchanges emerging as a focal point for such crimes, players like Binance have landed in trouble with various regulators, citing concerns like facilitating money laundering.

In this line, the exchange is currently on the spot for failing to uphold its money laundering obligations.

A new investigation has revealed that the exchange failed to share its money-laundering protocols despite welcoming partnerships with various governments. The exchange leadership maintains sources for the information are former disgruntled employees who are not happy. 

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Justinas Baltrusaitis
Author

Justin crafts insightful data-driven stories on finance, banking, and digital assets. His reports were cited by many influential outlets globally like Forbes, Financial Times, CNBC, Bloomberg, Business Insider, Nasdaq.com, Investing.com, Reuters, among others.

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