Criminals Using Privacy Wallets to Hide Stolen Bitcoin, Report Says

London-based crypto assets Risk Management Risk Management One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, Read this Term solutions provider, Elliptic released a report yesterday, which shows that nearly 13% of overall criminal proceeds in Bitcoin were sent to privacy wallets like Wasabi Wallet this year, compared to just 2% in 2019.

The report mentioned a significant rise in the use of privacy wallets by crypto criminals to launder illicit funds. According to the Elliptic research, the privacy wallet allows users to hide the money trail on the Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Read this Term, which makes it the preferred choice for people involved in money laundering and hacking.

The company tracked 35 money laundering and terrorist financing incidents and interviewed cryptocurrency compliance professionals along with its analysis of blockchain transactions linked to criminality. The results indicate that the criminals have found new ways to transfer illicit funds during 2020.

The risk management provider outlined 2 key incidents during 2020. First, the hack of social networking platform Twitter in July where criminals raised more than $120,000 in Bitcoin and sent a large amount through a Wasabi Wallet. Second, the hack of KuCoin, where scammers stole $280 million in crypto assets.

Crypto Crimes

Criminal activities related to digital assets surged in 2020 as several incidents were reported in different parts of the world, but the recent report indicates that the criminals are now focusing on privacy wallets to move stolen funds.

“As the technology evolves and new regulations come into force, our research shows that criminals are seeking new ways to launder dirty crypto-assets. The most significant trend we observed was the increasing use of privacy wallets such as Wasabi Wallet in the laundering process. In 2020 at least 13% of all criminal proceeds in Bitcoin were sent through privacy wallets, which is up from just 2% in 2019,” David Carlisle, Head of Policy and Regulatory Affairs at Elliptic, said in a statement.

Commenting on the effectiveness of the privacy wallets, Tom Robinson, Chief Scientist at Elliptic, said: “The use of privacy wallets does make it challenging to follow illicit funds flow through the blockchain, but that does not necessarily make them effective money laundering tools.”