Chainalysis says mixers laundered $7.8 billion in 2022

A report by blockchain forensics firm Chainalysis states that crypto mixers processed around $7.8 billion worth of digital assets in 2022.

Illicit money processed through mixing machines rises to 24%

On January 26, the company shared highlights of the report in a short Twitter thread. According to numbers shared in the thread, the amount of money processed through cryptocurrency mixers in 2022 was $3.7 billion less than what was processed by the same platforms in 2021.

The report shows that 24% of the $7.8 billion came from illegitimate addresses, a huge jump from the 10% recorded in 2021. This means that there has been a decrease in the number of legitimate mixer users due to strict regulations against the platforms.

However, at the same time, there has been a significant increase in the number of illegal users.

Mainly illegal money from North Korean hackers

According to the report, most of the illicit money processed by Mixers last year came from hacks, mainly carried out by bad actors linked to rogue states like North Korea.

Chainalysis suggests that such groups may not be so easily dissuaded by threats of sanctions because they already live in jurisdictions that are not cooperative with the United States.

The Chainalysis report shows that illegal addresses sent up to $23.8 billion in crypto assets in 2022. This figure is 68% higher than recorded in 2021.

The report also noted that major centralized exchanges (CEXs) were the largest recipients of these illicit funds, processing just under 50% of all funds sent from illicit wallets.

Fiat’s off-ramp services are crucial to the money laundering process

Chainalysis stressed the importance of external services that convert crypto assets into fiat currency for criminals and money launderers. However, the report noted that the on-chain data showed only “a few off-ramp services” that received the bulk of the illicit funds.

Chainalysis noted 915 out-of-order services, but only five of them received nearly 68% of the illicit funds transacted in 2022.

The chart below, provided by Chainalysis, shows that money laundering activity has been concentrated in a few depository addresses that have received illegal funds from fiat off-ramping services.

According to the data, most crypto money laundering centers around a small number of bad actors.

The graph above shows that four depository wallets received at least $100 million in illicit funds. Together, they made up about $1.1 billion. The remaining 1.2 million deposit addresses received less than $100 million and totaled $38 million.

According to the report, just 542 depository addresses received more than half of the $6.3 billion in illicit funds from cash deposit services in 2022.