💰Cryptocurrency Money Laundering: More Professional Than You Think

The United Nations estimates that the global money laundering scale reaches up to $2 trillion to $5 trillion annually. Although cryptocurrencies account for only a small portion, their annual growth rate has reached 16%, making them an emerging channel that cannot be ignored.

Crypto money laundering typically involves three steps:

1️⃣ On-Ramp
Initial illicit funds come from hacking, ransomware, dark web transactions, and more. For example, exchange hacks and ransomware extortion. Once the money enters the crypto world, the difficulty of recovery skyrockets. Data shows that in 164 cases, only an average of 27% of the funds were recovered.

2️⃣ Layering
This is the core of money laundering—obscuring on-chain traces. Common tools include:

· Mixer: Mixing everyone's coins together and then redistributing randomly to break the money trail.
· Cross-chain transfers: Moving assets between Bitcoin → Ethereum → other chains, jumping back and forth.
· DeFi circular trading: Repeatedly flowing between dozens or even hundreds of wallets.
· Privacy coins: Monero, Zcash, etc., inherently private.

3️⃣ Off-Ramp
The final step is converting crypto assets back into real-world money. 82% of funds are cashed out through exchanges or OTC traders. Notably, early dark web transactions mainly used Bitcoin, but now many funds end up in stablecoins due to their stable prices and ease of converting to fiat currency.

Who is involved?

· Hacker groups: North Korea’s Lazarus Group profits from stealing crypto assets, with Iran and Russia also active.
· Dark web markets: Early examples include Silk Road, later Hydra.
· Underground financial networks: Various OTC intermediaries. $ZEC