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tl;dr
Chainalysis recently reported on the increasing use of on-chain money transfers by traditional money launderers. The report, led by Kim Grauer, Head of Research at Chainalysis, highlighted a "large-scale money laundering infrastructure" created by criminals. It focused on money laundering from off-c...
Traditional money launderers are increasingly utilizing on-chain money transmission, as highlighted by a recent Chainalysis report. The report, led by Kim Grauer, Head of Research at Chainalysis, unveils a large-scale money laundering infrastructure created by traditional money launderers. The majority of transactions in 2024 were valued at $1-$10,000, sparking suspicion.
The report focuses on money laundering stemming from illicit off-chain crimes, distinct from the usual on-chain crypto crimes. It reveals that these transactions originate not only from wallets belonging to crypto scammers but also from wallets that are not currently identified as illicit, using strategies that could be flagged by traditional financial regulators.
An analysis of exchange transfers showed that a significant majority of the transactions were valued below the $10,000 mark, which triggers additional know your customer (KYC) verification. While transactions valued at $1-$10,000 are not always illegal, they are often considered a metric to track down criminal activities.
The report also details the most prevalent forms of money laundering in the crypto world. According to Chainalysis, almost 80% of illicit funds pass through intermediary wallets. Other methods employed by money launderers include mixers, privacy coins, and cross-chain protocols.
Chainalysis' report sheds light on the advanced tracking techniques being used and the prevalence of illicit funds passing through intermediary wallets, offering crucial insights into the evolving landscape of financial crime.