According to new data from Chainalysis, the number of money laundering schemes in which digital assets were involved increased last year, but they still account for a small percentage of crypto transactions.
According to a new report from the Chainalysis market analytics firm, 5% of global gross domestic product involves the laundering of fiat currency every year, and the numbers are steadily increasing. In comparison, as little as 0.05% of global crypto transactions have been found to involve money laundering.
“Overall, 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 estimates that between $800 billion and $2 trillion of fiat currency is laundered each year – as much as 5% of global GDP. For comparison, money laundering accounted for just 0.05% of all cryptocurrency transaction volume in 2021.”
Chainalysis also finds that money laundering through crypto assets is heavily concentrated, with most of the funds moving from illicit wallets to a “surprisingly” small number of entities. Bitcoin miners are also not involved in these shady practices.
“A group of just 583 deposit addresses received 54% of all funds sent from illicit addresses in 2021. Each of those 583 addresses received at least $1 million from illicit addresses, and in total, they received just under $2.5 billion worth of cryptocurrency.
An even smaller group of 45 addresses received 24% of all funds sent from illicit addresses for a total of just under $1.1 billion. One deposit address received just over $200 million, all from wallets associated with the Finiko Ponzi scheme.”
The market intelligence firm says that the sector of the crypto market most affected by money laundering is decentralized finance (DeFi), which saw a 1,964% year-over-year increase in the total value of funds received from illicit addresses.
Chainalysis also finds that the overall amount of money laundered through cryptocurrencies in 2021 was $8.6 billion, a 30% increase from 2020.
You can read the full Chainalysis report here.
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