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Cybercriminals laundered $8.6bn cryptocurrency, says report

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Cybercriminals laundered  $8.6bn worth of cryptocurrency in 2021, according to a report by Chainalysis Inc.


In the report titled ‘The 2022 Crypto Crime Report’, the blockchain data company disclosed that crypto-based crime hit a new high in 2021, with criminal accounts receiving $14bn within the year.

It said, “Overall, going by the amount of cryptocurrency sent from illicit addresses to addresses hosted by services, cybercriminals laundered $8.6bn worth of cryptocurrency in 2021.


“That represents a 30 per cent 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.

“We also need to note that these numbers only account for funds derived from ‘cryptocurrency-native’ crime, meaning cybercriminal activity such as darknet market sales or ransomware attacks in which profits are virtually always derived in cryptocurrency rather than fiat currency.

“It’s more difficult to measure how much fiat currency derived from offline crime – traditional drug trafficking, for example – is converted into cryptocurrency to be laundered. However, we know anecdotally this is happening, and later in this section provide a case study showing an example of it.”


According to the firm, cybercriminals have now laundered over $33bn worth of cryptocurrency since 2017, with most of this total moved through centralised exchanges.


It added money laundering accounted for about 0.05 per cent of all cryptocurrency transaction volume in 2021.

It said, “Money laundering is a plague on all forms of economic value transfer, and the biggest difference between fiat and cryptocurrency-based money laundering is that it is easy to trace how criminals move cryptocurrency between wallets and services in their efforts to convert their funds into cash.

“Bitcoin’s money laundering activity is the least concentrated by far. The 20 biggest money laundering deposit addresses receive just 19 per cent of all Bitcoin sent from illicit addresses, compared to 57 per cent for stablecoins, 63 per cent for Ethereum, and 68 per cent for altcoins.”

According to Chainalysis, total transaction volume of cryptocurrencies grew by 567 per cent in 2021 to $15.8tn in 2021.

It said $14bn worth of illicit activity in the crypto ecosystem signified a huge problem as criminal abuse of the digital currency would discourage continued adoption, increase the likelihood of government restrictions, and victimise innocent people around the world.

It said stolen funds and scams were the two categories of crypto crime that increased in the year, with scams revenue increasing by 82 per cent in 2021 to $7.8bn. It added that it identified about $602m in ransomware payments in 2021.

It said, “The average ransomware payment size was over $118,000 in 2021, up from $88,000 in 2020 and $25,000 in 2019. Large payments such as the record $40m received by Phoenix Cryptolocker spurred this all-time high in average payment size.

“One reason for the increase in ransom sizes is ransomware attackers’ focus on carrying out highly-targeted attacks against large organisations.”

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