THREAD: Here's a quick summary of the our takeaways on money laundering in cryptocurrency. bit.ly/3u3v2KK
Money laundering is the key to cryptocurrency-based crime, but is facilitated by a surprisingly small group of key players. How small? In 2020, 55% of funds sent from illicit addresses - $1.3B worth of cryptocurrency - went to 270 service deposit addresses blog.chainalysis.com/reports…
1
3
0
5
Money laundering is the key to cryptocurrency-based crime. If there was no way to move illicit cryptocurrency to a place it could be safely stored or exchanged for fiat, cybercriminals would have much less incentive to use cryptocurrency. bit.ly/3u3v2KK
1
0
0
0
So, where does money laundering happen? At a high level, most funds sent from illicit addresses go to exchanges and a category we label as risky services, which includes high-risk exchanges and mixers. bit.ly/3u3v2KK
1
0
1
1
Overall, funds sent from illicit addresses aren’t distributed evenly -- they tend to be concentrated at just a few services in any given year. bit.ly/3u3v2KK
1
0
0
0
Things get more interesting when we zoom in to the deposit address level. This graph shows all deposit addresses that received illicit crypto in 2020 bucketed by amount received. A small group of 270 took in 55%, or $1.3B worth. bit.ly/3u3v2KK
1
0
0
0
Notably, this represents an increase in money laundering concentration compared to 2019. bit.ly/3u3v2KK

6:30 PM · Feb 12, 2021

1
0
0
0
Who owns these deposit addresses? We know from transaction patterns and from our own investigations that most likely belong to nested services operating at exchanges, such as OTC brokers and instant exchangers. bit.ly/3u3v2KK
1
0
0
0
Below, we plot the 270 addresses mentioned above by total illicit crypto received vs. share of all crypto received that is illicit. Illicit crypto is a small share of all crypto received for many. But not those receiving the most illicit crypto overall. bit.ly/3u3v2KK
1
0
0
2
Put another way: 55% of all illicit crypto sent goes to deposit addresses for which illicit crypto represents over half of all crypto received. That figure rises to 71% for addresses receiving 30% or more of all crypto from illicit addresses. bit.ly/3u3v2KK
1
0
0
3
Our takeaway: Most money laundering in cryptocurrency is conducted by a small group of nested services who can be identified through blockchain analysis, as a huge percent of all crypto they receive comes from illicit addresses. bit.ly/3u3v2KK
1
2
0
6
You can read our latest blog to learn more about money laundering in cryptocurrency, or download the full 2021 Crypto Crime Report here. bit.ly/3rEp9RW
0
0
0
4