Cyber Criminals Using Crypto Mixing Services at Record Rates, According to Chainalysis
New data from market intelligence firm Chainalysis reveals bad actors are using crypto mixing services at unprecedented rates.
According to a new blog post by the crypto insights company, crypto mixing usage has spiked in 2022, with illicit addresses accounting for 11% more of the funds sent to mixers compared to last year.
“While value received by mixers fluctuates significantly day-to-day, the 30-day moving average reached an all-time high of $51.8 million worth of cryptocurrency on April 19th, 2022, roughly doubling incoming volumes at the same point in 2021…
Illicit addresses account for 23% of funds sent to mixers so far in 2022, up from 12% in 2021.”
A crypto mixing service is a tool used to make it difficult to follow the movement of money by pooling together funds of many different users and mixing them together. Users would then withdraw their funds, which have now been randomized.
Chainalysis says the market sector contributing most to rising crypto mixing usage rates is decentralized finance (DeFi).
“The increases come primarily from increased volumes sent from centralized exchanges, DeFi protocols, and most notably, addresses connected to illicit activity.
DeFi protocols in particular have risen not just in terms of value sent to mixers, but also in terms of the share of all volume sent to mixers, which makes sense given that the timing coincides with DeFi’s increasing prominence within the overall cryptocurrency ecosystem.”
Chainalysis also notes that while there are legitimate use cases for crypto mixers, such as financial privacy, the digital assets community and regulators should acknowledge that cyber criminals associated with hostile governments are taking advantage of the service.
“Mixers present a difficult question to regulators and members of the cryptocurrency community. Virtually everyone would acknowledge that financial privacy is valuable, and that in a vacuum, there’s no reason services like mixers shouldn’t be able to provide it.
However, the data shows that mixers currently pose a significant money laundering risk, with 25% of funds coming from illicit addresses, and that cybercriminals associated with hostile governments are taking advantage.”
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