Cryptocurrency money laundering declined significantly in 2023 according to new data from blockchain analytics firm Chainalysis. The report reveals illicit crypto addresses sent 29.5% less funds, totaling $22.2 billion, to various laundering services last year compared to 2022.
This drop exceeds the overall 14.9% decline in crypto transaction volume, indicating reduced laundering activity beyond mere market effects. Centralized exchanges remain the primary laundering channels, receiving 75.3% of illicit funds. However, Chainalysis spotted a slight shift towards decentralized finance (DeFi) protocols and gambling services.
Another notable trend is surging use of cross-chain bridges by theft-related addresses to obscure origins by moving funds across different blockchains. Chainalysis attributes this to growth in DeFi facilitating interoperability.
The report also found money laundering concentration at centralized exchanges largely unchanged, with 5 services receiving 71.7% of illicit funds.
However, concentration is reduced at individual deposit address levels, suggesting criminals are diversifying across more accounts to avoid detection.
Moreover, dophisticated groups like North Korea’s Lazarus Group have adapted to closures of major mixers like Tornado Cash by shifting to newer ones like YoMix.
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