Chainalysis Money Laundering and Cryptocurrency Report: Intermediary Wallets
With the advancement of cyber security and the ongoing release of stricter regulations on cryptocurrency, transactions, and digital asset service providers; the tactics and tools that bad actors use to continue their illicit activities continue to advance as well. The 2024 Chainalysis Money Laundering and Cryptocurrency report provides valuable insights into some of these tactics and behaviors of the bad actors. From this report, we are going to focus on the use of intermediary wallets.
Every month, billions of dollars flow through the crypto ecosystem from illicit wallets to conversion services. Among the other common obfuscation tactics is intermediary wallet hopping. This is a type of layering strategy that involves sending funds through numerous intermediary personal wallets in an attempt to obscure the connection between the illicit funds in the initial placement stage and their eventual integration.
Going into January of 2024, intermediary wallets accounted for roughly 80% of the share of the total volume flowing through common crypto laundering channels. This growth of total volume share dominance sits on the back of an ongrowing uptrend in sheer number of active known illicit intermediary wallets that has grown from roughly 8 thousand wallets to roughly 12 thousand wallets, from 2021 to 2023.
Along with the growth of the number of active known illicit intermediary wallets comes an uptrend of stablecoin transactions through said wallets. This rise in the use of stablecoins likely reflects the overall increase in stablecoin adoption over the last few years. An alarming trend that the Chainalysis report touches on is how the share of illicit funds going to the top 100 intermediary wallets are being used. Child abuse material, malware, and terrorist financing carry the three largest share percentages of illicit funds to these wallets, of which all are above 75%. This shows a strong level of concentration in some parts of the illicit sector.
To read more of the report go to: https://go.chainalysis.com/rs/503-FAP-074/images/Report_%20Money_laundering_and_Cryptocurrency.pdf?version=0&fbclid=IwZXh0bgNhZW0CMTEAAR0vMVFQCbqp0izc4Kal9u9BCR_J7oZarliYbhN4aY5Uk6wZgT5E8wac0DA_aem_hHsnjIlwYDnlNapoC1Z1qw
At ValidEntry, we diligently study the ongoing criminal activity, regulations, and breakthrough security surrounding cryptocurrency to provide your business with valuable information to help protect your investments. ValidEntry Verifications provide individual users control over their PII and enable quick and safe access to Web3.0 environments. At the same time, ValidEntry enables project teams the ability to easily meet new and changing regulation and compliance requirements to ensure that funds going through their platform are not tied to illicit activities. We welcome the opportunity to show individuals and projects how seamless it can be to implement our solution.
