Chainalysis Reports 30% Decrease in Crypto Money Laundering Cases Last Year

Crypto News– Chainalysis reported a significant decrease in illicit crypto activity last year, citing factors such as lower crypto trading volume and the development of evasion methods by sophisticated threat actors like the Lazarus Group. According to their annual report on crypto money laundering, $22.2 billion was laundered via crypto in 2023, down from $31.5 billion the previous year.

Chainalysis Reports 30% Decrease in Crypto Money Laundering Cases Last Year

This decline exceeded the reduction in transaction volumes, indicating additional factors contributing to the decrease in illicit activity. The report suggests that only about 1% of all money laundering is conducted using crypto, with the total value of illicit funds laundered estimated at around $2 trillion annually, as per a June 2023 Deloitte report.

Furthermore, there was a shift in laundering methods, with an increase in the use of blockchain bridges and gambling services observed in 2023, compared to greater reliance on illicit service types and centralized exchanges in 2022. Additionally, the share of illicit funds flowing into decentralized finance (DeFi) protocols has grown, attributed primarily to the rising total value locked (TVL) of DeFi platforms. However, Chainalysis noted that DeFi’s inherent transparency makes it less effective for obfuscating fund movements.

The report also highlighted instances where transparency facilitated tracking and shutdown of crypto accounts associated with organizations like Hamas, designated as a terrorist group by multiple jurisdictions. In response, threat actors like the Lazarus Group from North Korea have adapted their money laundering strategies to avoid detection.