Cybercriminals laundered $8.6 billion worth of cryptocurrencies in 2021, up 30% from 2020, according to a recent report by blockchain analytics firm Chainalysis. Money laundering simply refers to the practice of converting money earned through criminal means, such as arms smuggling, drug trafficking, etc., and making it appear as if it came from of legitimate business activity.

The report titled: “2022 Crypto Crime Report” notes that since 2017, more than $33 billion worth of crypto has been laundered, with most of the laundered money being transferred to cryptocurrency exchanges. The study reveals that profits from dark web sales or ransomware attacks are always derived from cryptocurrency rather than fiat currency, contributing significantly to the rise.

At least 17% of the $8.6 billion laundered went to decentralized financial apps, Chainalysis said. DeFi is an alternative financial ecosystem where consumers transfer, trade, borrow, and lend cryptocurrency, independent of traditional financial institutions and the regulatory structures that have been built around banking.

Meanwhile, mining pools (a group of cryptocurrency miners who combine their computational resources on a network to boost the probability of finding cryptocurrency), high-risk exchanges, and mixers (a practice where you ssend your money to an anonymous service and, if well-intentioned, they will send you someone else’s contaminated coins), also saw substantial increases in the value received from illicit addresses, according to the report.

The report adds, “Wallet addresses associated with the theft sent just under half of their stolen funds, or more than $750 million worth of crypto in total, to DeFi’s,”

Additionally, Chainalysis in its recent report revealed that scammers stole over $14 billion worth of cryptocurrency from victims in 2021, a 79% increase from $7.8 billion in 2020. of 2022, Chainalysis said illicit addresses already held more than $10 billion worth of cryptocurrencies. , with the majority held by wallets associated with cryptocurrency theft.

In another December report, Chainalysis revealed that at least 36% of victims lost over $2.8 billion (about Rs 280 crore) in “rug pull” cases. A rug pull is a malicious maneuver in the cryptocurrency industry where crypto developers abandon a project and run away with investors’ funds. In total, crypto scams are up 81% this year compared to 2020, driven by rug draws, the company said in a blog post.