Cryptocurrency Mixing Hits Record For Avoiding Sanctions
Bitcoin and cryptocurrency mixers have seen a massive increase in usage this year, as cybercriminals and countries under sanctions seek to hide their illicit funds by mixing them.
According to a July 14 report by blockchain analytics firm Chainalysis, the amount of cryptocurrencies sent through mixing services has increased to an all-time high.
Mixers have gained a bad reputation as they have become the method of choice for cybercriminals and countries under sanctions to launder digital assets. Chainalysis reports that almost 10% of all funds sent from illicit crypto addresses were sent to mixers.
The report adds that the amount of crypto sent to the mixers reached an ATH of $51.8 million in April. The figure touched $600 million in Q2 2022. The majority of them come from sanctioned institutions and stolen funds. The war in Ukraine and global sanctions imposed on Russia significantly impacted mixer usage in the first half of this year.
“What stands out most is the huge volume of funds moving to mixers from addresses associated with sanctioned entities, especially in Q2 2022.”
Mixers are not illegal activities; they provide services to people who need financial privacy. The US Financial Crimes Enforcement Network (FinCEN) clarified that the mixer is an on-demand money transfer machine registered under the Bank Secrecy Act (BSA).
Taking advantage of this legal loophole, addresses affiliated with countries under sanctions, such as the Russian darknet market Hydra and North Korean hacker group Lazarus, accounted for 80% of the funds sent to the mixers in 2022.
The report adds that the North Korean hacker group has stolen over $1 billion worth of crypto assets this year, mainly from DeFi protocols. The remaining amount of cryptocurrency sent to the mixer is sourced from protocol mining, scams, ransomware, and other nefarious sources. In April, the Ethereum mixer, Tornado Cash, agreed to block the addresses involved in the sanctions.
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