TL:DR Breakdown:
- Privacy wallets contribute about 13 percent of crypto laundering cases since this year.
- Elliptic noted that these wallets and crypto mixing services enabled criminals to launder proceeds from crime.
A report on Wednesday by Elliptic, a blockchain analytics company for financial crime compliance, showed that criminals are now shifting to using privacy wallets to launder proceeds from crime in cryptocurrencies like Bitcoin (BTC). The report – Financial Crime Typologies in Cryptoassets – highlights over 35 financial crime typologies that involve the use of Bitcoin and other digital currencies, and mixers by criminals to launder funds gotten from criminal acts.
Criminals are switching to privacy wallets
As reported, criminals used cryptocurrency mixing services to overcome the problem of being tracked by law enforcement agencies. This service enables them to deposit their Bitcoin proceeds in a pool to withdraw a different Bitcoin. Many bad actors have been using the mixing service, making it difficult to be pinpointed. Reportedly, the service enabled the KuCoin and PlusToken Ponzi scheme operators to launder the stolen funds.
Presently, criminals are frequently using privacy wallets to launder proceeds in Bitcoin, as the mixing services was recently cracked down on by regulators. The blockchain analytics company explained the increase in wallet use by criminal via a chart, which that money laundering with privacy wallets have surged significantly since this year. Elliptic noted in the report that more than 13 percent of Bitcoin laundering was perpetrated via the wallets.
Wallets are becoming a tool for criminals
These wallets contributed only two percent to crypto laundering last year. One of the incidents involving crypto laundering with privacy wallets is the recent Twitter hack. Many high-profile accounts in crypto and other sector were compromised to promote a cryptocurrency scam which ended by gathering more than $120,000 from unaware users. According to Elliptics, the attackers were able to launder the fund using a privacy wallet, Wasabi Wallet.
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