Cryptocurrency money laundering increases by 30% since 2021 – report

Europol report also finds use of cryptocurrency as part of criminal schemes is on the rise

 

$8.6 billion worth of cryptocurrency was laundered in 2021– a 30% increase in money laundering activity since 2020, according to a new report by crypto monitoring platform Chainanalysis.

Their annual research has found that cybercriminals have laundered over $33 billion worth of cryptocurrency since 2017. The numbers, that account for funds derived from cybercriminal activity where profits are made in cryptocurrency, are identified by the platform by monitoring addresses associated with criminal activity and estimating the amount laundered.

However, the report notes that while billions of dollars worth of cryptocurrency move from illicit addresses every year, most of it eventually ends up only at a small group of services, “many of which appear purpose-built for money laundering”.

As a way of hindering such activity from increasing, the report points to legal enforcement. “Law enforcement can strike a huge blow against cryptocurrency-based crime and significantly hamper criminals’ ability to access their digital assets by disrupting these services,” it says.

The significance of strengthening law enforcement in order to battle this specific type of money laundering was also highlighted by Europol earlier this week.

Backing Chainanlysis’ findings, the agency’s report titled ‘Cryptocurrencies: Tracing the Evolution of Criminal Finances’ found that the use of cryptocurrency as part of criminal schemes is increasing, and the uptake of such a payment medium is accelerating.

Despite this, the overall number and value of cryptocurrency transactions related to criminal activities “still represents only a limited share of the criminal economy when compared to cash and other forms of transactions,” the report notes.

The research by Europol also found that criminals have become more sophisticated in their use of cryptocurrencies, and it has now expanded beyond the confinement of cybercrime activities, to aid any type of crime that requires the transmission of monetary value.

“The ways criminals use cryptocurrencies is evolving, and it is spreading to all forms of serious and organised crime,” the report says, noting that fraud is the most frequently identified predicate offence in the illegal use of cryptocurrencies.

The EU police agency also found that money laundering networks specialised in large scale money laundering as a service have adopted cryptocurrencies and are offering their services to other criminals.

The report stresses the need for enforcement, advising police authorities that “improved regulation of the cryptocurrency environment now requires service providers and platforms to capture more information on users and transactions”.

                           
                               
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