$8.6bn Lost to Cryptocurrency-based Money Laundering in 2021

  • Richard Marley
  • February 21, 2022
  • 2 minutes read
  • 1576

‘The 2022 Crypto Crime Report’ by Chainalysis has revealed that a total of $8.6 billion was lost to cryptocurrency-based money laundering in 2021.

The blockchain data company shed light on financial crime through cryptocurrency, highlighting the large amount that was laundered in the last year. Criminal accounts received a total of $14 billion in 2021. 

It said, “Overall, going by the amount of cryptocurrency sent from illicit addresses to addresses hosted by services, cybercriminals laundered $8.6bn worth of cryptocurrency in 2021.”

“That represents a 30 percent increase in money laundering activity over 2020, though such an increase is unsurprising given the significant growth of both legitimate and illicit cryptocurrency activity in 2021.”

“We also need to note that these numbers only account for funds derived from ‘cryptocurrency-native’ crime, meaning cybercriminal activity such as darknet market sales or ransomware attacks in which profits are virtually always derived in cryptocurrency rather than fiat currency.”

“It’s more difficult to measure how much fiat currency derived from offline crime – traditional drug trafficking, for example – is converted into cryptocurrency to be laundered. However, we know anecdotally this is happening, and later in this section provide a case study showing an example of it.”

According to the company, the total money laundered through cryptocurrency since 2017 has surpassed $33 billion, where cyber criminals moved the majority of the amount through centralized exchanges.

In 2021, money laundering contributed to approximately 0.05 percent of all cryptocurrency transaction volume. 

Chainalysis said, “Money laundering is a plague on all forms of economic value transfer, and the biggest difference between fiat and cryptocurrency-based money laundering is that it is easy to trace how criminals move cryptocurrency between wallets and services in their efforts to convert their funds into cash.”

“Bitcoin’s money-laundering activity is the least concentrated by far. The 20 biggest money-laundering deposit addresses receive just 19 percent of all Bitcoin sent from illicit addresses, compared to 57 percent for stablecoins, 63 percent for Ethereum, and 68 percent for altcoins.”

Suggested read: Crypto Providers at Risk of Money Laundering & Terror Financing, Says FMA