According to a report by Chainalysis, money laundered through cryptocurrency exchanges decreased by 29 percent in 2023.
The report, obtained on Thursday, revealed that these illicit funds were reduced by approximately $9.3 billion, from $31.5 billion in 2022 to $22.2 billion in 2023.
The blockchain research platform noted that the drop could be attributed to an overall decrease in the volume of crypto transactions, both legitimate and illicit.
Chainalysis noted that centralized exchanges had been the primary destination for funds sent from illicit addresses, at a rate that has remained relatively stable over the past five years.
โOver time, the role of illicit services has reduced, while the proportion of illicit funds going into DeFi protocols has increased.
โWe attribute this primarily to the overall growth of DeFi over the period, but we should also note that DeFi's inherent transparency generally makes it a poor choice for obfuscating the movement of funds,โ he said.
The firm indicated that the 2023 trend closely resembled that of 2022 in terms of the breakdown of the types of services used for money laundering.
However, he added that there was a slight decrease in the proportion of illicit funds directed to types of illicit services, accompanied by an increase in funds directed to gambling services and bridging protocols.
โIf we zoom in to look at how specific types of crypto criminals laundered money, we can see that there was a significant change in some areas. In particular, we saw a large increase in the volume of funds sent to cross-chain bridges from addresses associated with stolen funds.
"We also saw a substantial increase in funds sent from ransomware to gaming platforms, and in funds sent to bridges from ransomware wallets," he added.
Additionally, Chainalysis said that 109 exchange deposit addresses received more than $10 million in illicit cryptocurrency each and collectively received $3.4 billion in illicit cryptocurrency in 2023.
โWhile that still represents a significant concentration, in 2022, just 40 addresses received more than $10 million in illicit cryptocurrency, for a collective total of just under $2 billion.
