Money laundering via cryptocurrency drops by $9bn, Report reveals

The money laundered through cryptocurrency exchanges dropped by 29 per cent in 2023, as reported by the Chainalysis report.

According to a report on Thursday, those illicit funds declined by approximately $9.3bn, dropping from $31.5bn in 2022 to $22.2bn in 2023.

Chainalysis stated that the drop could be caused by an overall decline in crypto transaction volume, both legitimate and illicit.

It said, “Over time, the role of illicit services has shrunk, while the share of illicit funds going to DeFi protocols has grown.

“We attribute this primarily to the overall growth of DeFi generally during the period, but must also note that DeFi’s inherent transparency generally makes it a poor choice for obfuscating the movement of funds.”

The firm noted that the 2023 trend closely looked like 2022 regarding the breakdown of service types used for money laundering.

It added, “If we zoom in to look at how specific types of crypto criminals laundered money, we can see that there was a significant change in some areas. Most notably, we saw a huge increase in the volume of funds sent to cross-chain bridges from addresses associated with stolen funds.

“We also observed a substantial increase in funds sent from ransomware to gambling platforms and in funds sent to bridges from ransomware wallets.”

Additionally, the firm said 109 exchange deposit addresses received over $10m worth of illicit cryptocurrency each, and collectively, they received $3.4bn in illegal cryptocurrency in 2023.

“While that still represents significant concentration, in 2022, only 40 addresses received over $10m in illicit crypto, for a collective total of just under $2.0bn.”