Mixers are technical tools used to obfuscate the origins and owners of the cryptocurrencies. Although it is not used for only criminal activities, the usage of mixers in 2022 for illegal transactions reached the peak according to a report by Chainalysis.
One of the benefits of mixers is privacy for individuals who want their address hidden from the public eye. Because of the advanced level of anonymity provided by mixers, criminals tend to use them for their activities. When funds are sent through a mixer, the fund comes out ‘cleaned’, and can not be tracked.
$7.8 billion passed through Mixers in 2022
According to Chainalysis, in 2021, Mixers processed $11.5 billion, and about $1.15 billion of the funds were linked to illicit activities. But in 2022, the processed figure fell to $7.8 billion, however, the illicit funds reached $1.8 billion.
Analysis showed that while lesser persons and organizations utilized Mixers in 2022, more criminals found it handy.
“It’s also worth noting that the vast majority of illicit value processed by mixers is made up of stolen funds, a large share of which were stolen by North Korea-linked hackers”.
Criminals are leaving less money in wallets
Another trend observed by Chainalysis is that more illegal operators are leaving fewer cryptocurrencies in their wallets. Prior to now, these bad actors left more assets in their wallets for either protection against security agencies who are trying to track or trace them or to allow their assets to appreciate to an expected price so they can gain more value.
However, in 2022, the report revealed that “criminal balances have plummeted in value from $12.0 billion at the end of 2021 to just $2.9 billion”. Some of the reasons highlighted by Chainalysis include the price effect of the bear market as well as seizures from law enforcement agencies.
Furthermore, the on-chain data openness found in the crypto space makes it different from the traditional system where monies can be dumped and sometimes hard to trace. “In cryptocurrency, criminal holdings can’t be stashed away in opaque networks of banks and shell corporations — almost everything is out in the open,” Chainalysis said.
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