Cybercriminals dealing in cryptocurrency share one common goal: Move their ill-gotten funds to a service where they can be kept safe from the authorities and eventually converted to cash according a new report by Chainalysis. This explains why money laundering underpins all other forms of cryptocurrency-based crime. If there’s no way to access the funds, there’s no incentive to commit crimes involving cryptocurrency in the first place.
The reported noted, money laundering activity in cryptocurrency is also heavily concentrated. While billions of dollars’ worth of cryptocurrency moves from illicit addresses every year, most of it ends up at a surprisingly small group of services, many of which appear purpose-built for money laundering based on their transaction histories. Law enforcement can strike a huge blow against cryptocurrency-based crime and significantly hamper criminals’ ability to access their digital assets by disrupting these services. We saw an example of this last year, when the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) sanctioned two of the worst-offending money laundering services — Suex and Chatex — for accepting funds from ransomware operators, scammers, and other cybercriminals. But as we’ll explore below, many other money laundering services remain active.