Cryptocurrency illicit activity has decreased significantly in the last year, as cryptocurrency trading volumes have declined and sophisticated threat actors like Lazarus Group have developed ways to evade detection. This was stated in the annual report on virtual currency money laundering..
According to Chainalysis, $22.2 billion was laundered through cryptocurrencies in 2023, down from $31.5 billion the year before. This decline was greater than the decline in trading volume, suggesting that factors other than the overall market downturn may have contributed to the decline in illegal activity. This figure suggests that only about 1% of all money laundering is carried out using cryptocurrencies. Deloitte said in her June 2023 report that the value of all laundered illicit funds is approximately $2 trillion annually.
2023 saw an increase in the use of blockchain bridges and gambling services for cryptocurrency laundering, while 2022 saw an increase in reliance on illicit service types and centralized exchanges.
“DeFi is inherently transparent, so it is generally a poor choice to obfuscate the movement of funds,” Chainalysis said.
For example, Hamas is listed as a terrorist group by the United States, United Kingdom, European Union, and other jurisdictions. Cryptocurrency procured was trackedand Cryptocurrency account is closedfor blockchain transparency.
According to Chainalysis, North Korea-based threat actor Lazarus Group is adapting its money laundering strategies to avoid the same fate.
“The growth of YoMix and its adoption by Lazarus Group is a prime example of the ability of sophisticated actors to adapt and find alternative obfuscation services when a previously popular service is shut down. ,” Chainaracy wrote.
While bridges have grown in popularity due to Lazarus Group's preferences, the value of funds sent to mixers from illegal addresses has nearly halved to $504.3 million.
“Much of that is likely due to law enforcement and regulatory efforts, such as the sanctions and closure of Mixer Sinbad in November 2023,” Chainalysis noted.
The US Treasury has sanctioned cryptocurrency mixer Sinbad for suspected ties to a North Korean hacking group, leading to the seizure of its website by the FBI, Dutch and Finnish authorities. CoinDesk reported at the time.
“The changes in money laundering strategies we have seen from crypto criminals like Lazarus Group mean that the most sophisticated illegal actors are constantly adapting their money laundering strategies and exploiting new types of crypto services. It serves as an important reminder,” Chainalysis concluded.
