Crypto is becoming an increasingly popular tool for money launderers to hide the trail of their funds, according to Chainalysis.

• Crypto is being used for illicit activities due to its cross-border, virtually instant, and inexpensive transaction capabilities, according to Chainalysis.
• "Crypto has become a popular tool for laundering proceeds from various illegal activities, including narcotics trafficking and fraud."
• Bitcoin, the world's largest cryptocurrency, has experienced a 55% increase in value this year.

Cryptocurrencies are increasingly being used by money launderers to hide the source and trail of illegally-acquired funds, according to a report by Chainalysis.

The study found that crypto is being used for illegal activities such as drug trafficking and fraud because it is "cross-border, instant, and inexpensive to transact."

Crypto has become a popular tool for laundering proceeds from various illegal activities, including narcotics trafficking and fraud. By 2024, money laundering in crypto will encompass all types of crime, not just those that are directly linked to the crypto ecosystem, according to a report by a blockchain analytics firm.

The value of the world's largest cryptocurrency, Bitcoin, has experienced a 55% increase this year, as reported by LSEG.

Crypto mixers, cross-chain bridges, and "hops" between wallets are some of the methods used by money launderers to obscure the trail of funds.

Crypto mixers and bridges are used by bad actors to make it difficult to trace the origin and ownership of cryptocurrency.

To evade detection, funds are transferred between multiple intermediary wallets through the use of hops.

In 2022, the highest amount of funds transferred from illicit wallets to conversion services was $30 billion, according to Chainalysis data. Since 2019, almost $100 billion in funds have been transferred from known illicit wallets to conversion services where crypto is converted to fiat currency.

Garantex, a Russian crypto exchange that has been sanctioned, played a significant role in the record amount of crypto being laundered, as its services allow criminals to convert their illicitly-acquired crypto into cash.

But these illegitimate activities can still be tracked down, Chainalysis said.

The transparency of blockchain technology allows for a higher degree of accuracy and speed in tracing and analyzing crypto laundering, but the report predicts that it will become more prevalent.

The blockchain analytics firm, Chainalysis, predicts that as the world becomes more accepting of cryptocurrencies and the barriers to entry decrease, the use of cryptocurrencies for money laundering will increase, as criminals have a history of exploiting new technologies for their own gain.