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More than half of crypto money laundering activities coursed through 270 addresses, says Chainalysis

Russia is the top destination for crypto funds from darknet transactions, China for ransomware, and the U.S. for funds coming from online scams.

Image by Pete Linforth from Pixabay

Tue, 16 Feb 2021, 05:17 am UTC

Cryptocurrency critics have always highlighted crypto’s potential use in criminal activities such as money laundering. A recent study by a blockchain analytics firm revealed that more than half of crypto-related activities are concentrated on a small number of addresses making it possible for law enforcement to investigate and take action.

Cybercriminals concentrate their cryptocurrency money laundering activities on a few online services, according to In fact, 55 percent of money laundering activities that involve digital currencies are coursed to only 270 crypto addresses in 2020. The report added that a group of 1,867 addresses received 75 percent of crypto from illicit addresses for the same period.

This was revealed in a report published last week by the blockchain investigations firm Chainalysis. The crypto services preferred by criminals include online gambling platforms, high-risk (low-reputation) digital currency exchanges, financial services located in high-risk jurisdictions, and cryptocurrency mixing services.

This makes it easier for law enforcement to investigate illicit activities involving cryptocurrencies. “They [cybercriminals] rely on a surprisingly small group of service providers to liquidate their crypto assets,” Chainalysis wrote in a blog post. “Investigators could significantly damage cybercriminals’ ability to convert cryptocurrency into cash by going after these money-laundering service providers.”

Chainalysis studied criminal activities that used cryptos such as ransomware attacks, online scams, hacks, terrorist funding, child abuse materials, dark web transactions that involved drugs, weapons, and stolen data. In most types of criminal activity, high-risk exchanges remain the top choice for money laundering followed by financial services in high-risk jurisdictions followed by crypto mixers.

The exception is online scams where most of the scammers’ money laundering is done via online gambling platforms, a trend that started in 2020. This is followed by high-risk jurisdiction financial service providers and crypto mixing services.

The study also mapped out the countries that received the highest volume of crypto from illicit addresses. The United States tops the list followed by Russia, China, South Africa, United Kingdom, Ukraine, South Korea, Vietnam, Turkey, and France.

However, patterns emerge when the funds are grouped by crime category. For instance, Russia is the top destination for crypto funds from darknet transactions, China is the top choice for ransomware, and the U.S. is the top destination for funds coming from online scams.

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  • 2021.02.18 18:05:28
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