Cryptocurrency Money Laundering Climbs 30% in 2021

Compared to 2020, the crypto-related activities of cybercriminals surged substantially in 2021. The fraudulent actors laundered more than $8.6 billion worth of cryptocurrency assets last year, which is 30% higher compared to $6.6 billion in 2020.

A recent report from Chainalysis, a prominent blockchain data platform, shows that cybercriminals have laundered more than $33 billion worth of cryptocurrency assets since 2017. In 2021, money laundering accounted for just 0.05% of all cryptocurrency transaction volume.

The role of decentralized finance (DeFi) has increased in cryptocurrency money laundering during the last 12 months. According to the report published by Chainalysis, DeFi protocols received nearly 17% of overall funds sent from illegal wallets in 2021, which is up from 2% in 2020.

“Overall, cybercriminals have laundered over $33 billion worth of cryptocurrency since 2017, with most of the total over the time moving to centralized exchanges. For comparison, the UN Office of Drugs and Crime estimates that between $800 billion and $2 trillion of fiat currency is laundered each year, as much as 5% of global GDP,” the report noted.

“For comparison, money laundering accounted for just 0.05% of all crypto transaction volume in 2021. We cite those numbers not to try and minimize cryptocurrency’s crime-related issues, but rather to point out that money laundering is a plague on virtually all forms of economic value transfer,” Chainalysis added.

Cryptocurrency Crime

While cryptocurrency-related crimes such as scams and theft have increased in the past 12 months, tracing and tracking of such incidents have surged as well. In 2021, millions of dollars worth of hacked funds were recovered. Additionally, in comparison to 2019, the overall volume of the money laundered through crypto assets has decreased.

In 2021, DeFi protocols received a total of $900 million from illicit crypto addresses, which is 1,964% higher compared to the last year.