The reduction in cryptocurrency activity last year contributed to a corresponding decrease in crypto money laundering.
This is according to a recent report on cryptocrime from blockchain data company. Chain analysiswhich showed that the illicit addresses sent 22.2 billion dollars worth of cryptocurrencies to services in 2023, a sharp drop from the $31.5 billion sent in 2022.
"Part of this drop can be attributed to an overall decline in the volume of crypto transactions, both legitimate and illicit," the report says. "However, the drop in money laundering activity was steeper, at 29.5%, compared to the 14.9% drop in total transaction volume."
The report also says that money laundering tactics are changing and that more sophisticated crypto criminals are using bridges and mixers.
It's possible, Chainalysis said, that crypto criminals are diversifying their money laundering activity across more nested services or deposit addresses to better hide it from law enforcement and exchange enforcement groups.
"Spreading the activity across more addresses may also be a strategy to lessen the impact of a deposit address being frozen for suspicious activity," the report says.
"As a result, fighting crypto crimes through money laundering infrastructure may require greater diligence and understanding of the interconnection across on-chain activity than in the past, as the activity is more diffuse."
Last year we saw cryptocurrency and FinTech companies will receive 5.8 billion dollars in fines Due to lax financial controls, it is the first time that sanctions against these groups exceed those imposed on traditional financial companies.
The fines were for things like misconduct appropriate money laundering measures or customer checks, as well as other issues related to financial crimes. Meanwhile, traditional financial services companies paid $835 million in fines in 2023, the lowest figure in a decade.
However, Dennis Kelleher, executive director of the regulatory advocacy group Better marketsHe told the Financial Times that the figures were an indicator of poor practices among crypto companies, not a sign that traditional banks had improved their behavior.
โWidespread fraud and criminality in the high-profile crypto space forced regulators and prosecutors to divert resources,โ he said, calling it an effort to โstop the egregious conduct and try to deter it from getting even worse.โ
Earlier this month, Cybera, a provider of advanced prevention and reporting tools, integrated with Chainalysis to offer government agencies and compliance teams insights to combat scams and prevent financial cybercrime.
โBy integrating our scam crime information obtained through our AI-powered platform with Chainalysis blockchain data, we are raising the bar for scam detection and prevention,โ Nicola Staub, CEO of Cybera, said in the statement. "Our joint efforts, focused on speed and accuracy, will provide government agencies and compliance teams with unparalleled insights."
