Crypto Mixers Become Popular among Cybercriminals


Coinspeaker
Crypto Mixers Become Popular among Cybercriminals

Crypto mixers or “Tumblers” have been said to be the best way to protect individual user identity by privacy advocates. However, a recent report indicates that it has gained popularity among cybercriminals and nation-states. According to Blockchain analytics firm Chainalysis, the use of crypto mixers doubled in 2022 with illicit transactions said to be the top contributor.

Mixers are known for hiding the traces of transactions making the sender and the receiver anonymous. Chainalysis report discloses that the 30-day moving average of the total daily value recorded an all-time high of $51.8 million in April across crypto mixers.

“Illicit addresses account for 23% of funds sent to mixers so far in 2022, up from 12% in 2021,” said the report.

This is double the incoming volume recorded over the same period in 2021. It was observed that the funds going to mixers primarily comes from Darknet markets, hackers, North Korean Lazarus Group, Defi protocols, centralized exchanges, as well as addresses connected to illicit activities linked to sanctioned countries.

The report further discloses that out of all the funds sent from illicit addresses, 10% were exclusively sent to Crypto mixers. A compelling observation from the Q2 2022 data is that funds sent from my illicit addresses came from stolen funds and fraud shops. There have been a lot of arguments around crypto mixers with Blender.io sanctioned by the United States Treasury. This was part of the infamous Axie Infinity hack which saw the loss of $620 million in digital assets. Also, another crypto mixer, Tornado Cash, open-sourced its user interface code to become fully decentralized and transparent.

It is important to note that crypto mixers are currently not illegal. However, regulators could take another look at this area. The United Kingdom’s National Crime Agency (NCA) in March hinted that it is seeking to regulate coin mixers to ensure that they comply with its anti-money laundering laws.

Chainalysis admitted that there are good reasons to use mixers, especially under an oppressive government or a crypto-unfriendly jurisdiction.

“However, mixers’ core functionality, combined with the fact that they rarely, if ever, ask for KYC [Know Your Customer] information, makes them naturally attractive to cybercriminals,”  according to Chainalysis.

Crypto Mixers Become Popular among Cybercriminals

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