‘$22bn Laundered Through Cryptocurrency In 2023’

A total of $22.2 billion was laundered globally through different cryptocurrency exchanges in 2023, a report has revealed.

This figure is a decrease from the $31.5 billion laundered through digital currency in 2022, the report by blockchain research platform, Chainalysis indicated.

The analysis suggested that the decline may be due to a general decline in the volume of cryptocurrency transactions, both legal and illegal.

According to Chainalysis’s analysis, during the past five years, cash transmitted from unlawful addresses have primarily ended up at centralised exchanges, at a rate that has stayed pretty consistent.

The proportion of illicit revenues going to DeFi protocols has increased over time, while the role of illicit services has decreased.

“We attribute this primarily to the overall growth of DeFi generally during the time period, but must also note that DeFi’s inherent transparency generally makes it a poor choice for obfuscating the movement of funds,” it said.

In terms of the distribution of money laundering service types, the company found that 2023 was mostly similar to 2022; however, there was a minor decline in the percentage of illicit funds that went toward these sorts of services and an increase in funds that went toward casino services and bridge protocols.

“If we zoom in to look at how specific types of crypto criminals laundered money, we can see that there was in fact a significant change in some areas. Most notably, we saw a huge increase in the volume of funds sent to cross-chain bridges from addresses

associated with stolen funds. We also observed a substantial increase in funds sent from ransomware to gambling platforms, and in funds sent to bridges from ransomware wallets,” it added.

Studying the concentration of money laundering at the deposit address level (deposit addresses are addresses at centralised services linked to specific users — similar to bank accounts) revealed that 109 exchange deposit addresses received more than $10 million in illicit cryptocurrency on average in 2023, totaling $3.4 billion.

“While that still represents significant concentration, in 2022, only 40 addresses received over $10 million in illicit crypto, for a collective total of just under $2.0 billion. In 2022, just 542 deposit addresses received over $1 million in illicit cryptocurrency, for a total of $6.3 billion, which was over half of all illicit value received by centralized exchanges that year. In 2023, 1,425 deposit addresses received over $1 million in illicit cryptocurrency, for a total of $6.7 billion, which accounts for just 46 per cent of all illicit value received by exchanges for the year,” it said.