According to Chainalysis, more than half of the cryptocurrencies obtained through fraud, ransomware, or used in the darknet markets are deposited on five main services.
According to a report by the analytical company Chainalysis, 55% of all illegally obtained crypto assets are laundered through just five services using approximately 270 unique deposit addresses.
The researchers concluded that the largest processors of illegally obtained cryptocurrencies, receiving more than $25 million a year, intentionally serve criminals and are unlikely to be able to continue working without them. Identifying and prosecuting the owners of these deposit addresses could help bring down much of the infrastructure that is currently being used to launder crypto assets.
Chainalysis works with cryptocurrency exchanges and law enforcement agencies to identify the addresses of cryptocurrency wallets used for phishing or social media fraud, as well as ransomware programs, darknet market users, and other criminals.
Companies track crypto assets as they move through multiple wallets or exchanges to final addresses. These addresses are used to identify other users, allowing researchers to gain an incomplete but valuable insight into the money laundering infrastructure.
Without making any specific charges, Chainalysis called “embedded services”, including itBit in Paxos, and Changelly in HitBTC, important elements in the money laundering system. These third-party services use trading pairs and the liquidity of a larger exchange to mask illegal activity within the parent exchange’s shared transaction pool.
In January, Chainalysis reported that last year, the share of cryptocurrency transactions related to illegal activities significantly decreased – from 2.1% in 2019 to 0.34% in 2020. At the same time, in 2020, criminals laundered $34 million worth of crypto assets through DeFi protocols.