BLOCKCHAIN
BLOCKCHAIN
BLOCKCHAIN
Report finds criminals move cryptocurrency through a small number of services
A new report has found that criminals who use cryptocurrency launder their funds through a small number of online services.
Chainalysis Inc., which last month said only 0.34% of cryptocurrency is traded for illicit purposes, found last week that the actual number of those undertaking illicit transactions is also remarkably small.
Describing money laundering as “highly concentrated,” Chainalysis found that just 1,867 deposit addresses received 75% of all cryptocurrency value sent from illicit addresses in 2020. A smaller group of 270 addresses collectively received 55% of transactions from illicit addresses for a total of $1.3 billion. Of the 270, a smaller group again of just 24 received over $500 million in cryptocurrency in the year.
The numbers get more interesting yet. Some 55% of all illicit cryptocurrency funds were found to be deposited into just five exchange services.
Nested service providers operate by setting up accounts on major cryptocurrency exchanges, then act as a middleman of sorts in facilitating transactions. As Giles Dixon noted, it’s analogous to hotel booking websites that aggregate hotel room rates and offer them under one platform. In the cases here, the nested provider masks illicit activity within the overall pool of transactions from the parent exchange, Decrypt wrote.
“We believe the growing concentration of deposit addresses receiving illicit cryptocurrency reflects cybercriminals’ increasing reliance on a small group of OTC brokers and other nested services specializing in money laundering,” Chainalysis noted. “A significant share of money laundering in cryptocurrency isn’t flying under the radar at big services who can’t sift through transactions to spot it, but is being actively facilitated by nested services for whom money laundering is a key part of the business model.”
Chainalysis added that “law enforcement could significantly hamper cybercriminals’ ability to convert cryptocurrency into cash by identifying and prosecuting the owners of these deposit addresses.”
Image: Pixabay
A message from John Furrier, co-founder of SiliconANGLE:
Support our mission to keep content open and free by engaging with theCUBE community. Join theCUBE’s Alumni Trust Network, where technology leaders connect, share intelligence and create opportunities.
- 15M+ viewers of theCUBE videos, powering conversations across AI, cloud, cybersecurity and more
- 11.4k+ theCUBE alumni — Connect with more than 11,400 tech and business leaders shaping the future through a unique trusted-based network.
About SiliconANGLE Media
SiliconANGLE Media is a recognized leader in digital media innovation, uniting breakthrough technology, strategic insights and real-time audience engagement. As the parent company of SiliconANGLE, theCUBE Network, theCUBE Research, CUBE365, theCUBE AI and theCUBE SuperStudios — with flagship locations in Silicon Valley and the New York Stock Exchange — SiliconANGLE Media operates at the intersection of media, technology and AI.
Founded by tech visionaries John Furrier and Dave Vellante, SiliconANGLE Media has built a dynamic ecosystem of industry-leading digital media brands that reach 15+ million elite tech professionals. Our new proprietary theCUBE AI Video Cloud is breaking ground in audience interaction, leveraging theCUBEai.com neural network to help technology companies make data-driven decisions and stay at the forefront of industry conversations.
