Chainalysis Money Laundering and Cryptocurrency
Chinalysis released a new report this month updating information from their 2024 Crime Report and focused attention on the issues of money laundering. Since 2019, nearly $100 billion in funds has been sent from illicit wallets to conversion services and $30 billion received in 2022 alone, the highest individual amount. Additionally, the total amount of intermediary wallets that have been marked for moving illicit funds have steadily increased from 2021 through 2023, and their primary focus is stablecoins. From 2021 through 2023, the amount of intermediary wallets that have moved illicit funds in the form of stablecoins has increased by more than 4 million wallets.
Stablecoins now account for the majority of all illicit transaction volume. We believe this is the case because the overall adoption of stablecoins has increased due to the value of the asset, how it is less volatile than other cryptocurrencies, and it is less prone to impact by swings in the market.
The sheer popularity and thus adoption of stablecoins has also led to widespread regime change on a global scale. Two of the biggest movers is the EU’s MICA regulation that specifically targets the use of stablecoins and calls for thorough insight into crypto asset service providers operations and security, and the UK’s federal agency and central bank unified front to create their own stablecoin regime. This regulatory response is on the backs of prior legislation that already outlined rules for exchanging crypto, but it had not targeted stablecoins because they were not yet seen as impactful enough of an asset to require such measures.
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