A recent report from Chainalysis shows that 270 cryptocurrency service deposit addresses are the most commonly used for illicit cryptocurrency money laundering. Combined, they account for roughly 55% of all cryptocurrency money laundering. This number is expected to rise to seven million by 2020 and the total amount of illicit cryptocurrency will top $13 billion. Illicit cryptocurrency transactions may be hidden in legitimate transactions, or they may be nested within them.
270 service deposit addresses account for around 55% of illicit cryptocurrency money laundering
According to a Chainalysis report, 270 service deposit addresses are responsible for at least $55 million in illicit cryptocurrency money laundering each year. Some of these addresses are controlled by criminals, while others are part of larger exchanges. Whatever the case, these deposit addresses are making it more difficult to trace illicit activity and to prevent it.
Most of the illicit cryptocurrency that travels to service deposit addresses ends up in these accounts, and a smaller percentage makes it through legitimate transactions. This allows for the illicit activity to go undetected by law enforcement. In order to combat this, investigators must assess each and every deposit address and nested services to ensure that there are no unauthorized transactions.
Some of these services may be providing money laundering services to criminals, and they may be operating under lax compliance policies. However, if these businesses are shut down, their illegal activities might continue. For example, some of these deposit addresses receive a high proportion of illicit funds from illicit addresses, and they may continue to operate even if they cease to serve the criminals.
The recent Bitcoin bubble has brought the cryptocurrency industry to the attention of regulators and governments. However, this has not stopped the criminals from using cryptocurrency for a variety of illegal purposes. Blockchain investigation firms suggest that these criminals have become concentrated around a few high-risk online services. These include high-risk cryptocurrency exchange portals and online gambling platforms. These services also support activities that take place in high-risk jurisdictions.
270 service deposit addresses facilitate money laundering
According to a recent report by Chainalysis, about 55% of all cryptocurrency money laundering is conducted through 270 service deposit addresses, which represent $1.3 billion in digital assets. Many of these service deposit addresses are controlled by cybercriminals, while some are nested within larger exchanges. This allows them to launder money through multiple exchanges.
In an effort to conceal their activities, criminals use a small group of cryptocurrency brokers and services to facilitate money laundering. In fact, only a handful of these addresses received over $10 million in illicit digital currencies last year. Some of these companies are able to operate because they don’t have any money laundering compliance programs.
These services are the primary conduits used by criminals to launder illicit cryptocurrency funds. According to a recent study by Chainalysis, about 55% of all illicit cryptocurrency transfers in 2020 were routed through 270 service deposit addresses. This means that, in the next few years, over $500 million of illicit cryptocurrency transfers are expected to be routed through 24 of these addresses.
While the majority of these deposits are associated with money laundering, many of these transactions are also attributed to legitimate activity. The study also found that illicit activity makes up a smaller portion of all service deposit addresses, which makes it easier for them to go unnoticed. However, in order to properly investigate the occurrence of money laundering, investigators must evaluate all deposit addresses and nested services.
270 service deposit addresses facilitate money laundering through nested services
According to the latest report from Chainalysis, more than 270 service deposit addresses facilitate the laundering of nearly half of all illicit cryptocurrency funds. This represents around $1.3 billion in digital assets. Some of these addresses are controlled by cybercriminals, and others are nested within larger exchanges. This makes it easier for criminals to launder funds and hide the trail of illicit activity.
Although a large proportion of service deposit transactions are legitimate, there are still concerns about the fact that some companies have a low degree of compliance. Consequently, they are not immediately shut down, and they may continue to receive funds from cybercriminals despite being shut down. Because of this, investigators must evaluate every single service deposit address.
In 2018, 270 service deposit addresses accounted for 55% of the cryptocurrency money laundering activity, representing approximately $1.3 billion in digital assets. According to Chainalysis, some of these accounts were operated by criminals, but there are also legitimate services that run these accounts. Many of these deposit addresses are operated by nested services within larger exchanges.
It’s crucial that these services monitor their transactions more diligently. This could make the cryptocurrency ecosystem a safer place to operate.