in ,

Chainalysis: DeFi Protocols, Law Enforcement Decentralize Crypto Money Laundering in 2021

Chainalysis: DeFi Protocols, Law Enforcement Decentralize Crypto Money Laundering in 2021 - top government contractors - best government contracting event

A preview of a Chainalysis report notes that while money laundering with cryptocurrency is still concentrated to a set of centralized services, it was less intensive in 2021 than in 2020.

According to a blog post on the cryptocurrency investigation website, 54 percent of funds from illicit sources were directed to 583 deposit addresses in 2021 compared to 55 percent of cryptocurrency sent to 270 service deposit addresses in 2020.

The change was attributed to law enforcement crackdowns that may have played a role in cybercriminals dispersing their funds to more outlets.

In addition, decentralized finance protocols also majorly affected the dispersal of funds to centralized exchanges. In 2021, DeFi protocols accounted for 17 percent of funds sent from illicit accounts, a 2 percent increase from 2020.

The total amount received by DeFi protocols in 2021 is an estimated $900 million. The report calculates the figure as a 1,964 percent year-over-year uptick in amounts dispersed to DeFi protocols from illicit sources.

DeFi protocols also accounted for the platform with the most cryptocurrency theft.

2021 saw cybercriminals launder a sum of $8.6 billion in cryptocurrency, in terms of cryptocurrency sent from illicit addresses to service addresses.

The Chainalysis report notes that not all activity is able to be tracked and included in the data due to offline transactions.

In an interview with ExecutiveBiz, Gurvis Grigg, Chainalysis public sector chief technology officer, theorized that while stats like these may make it seem like cryptocurrency is part of the problem, “it’s actually one of the solutions to address these kinds of fraud,” with the proper security measures in place.

“Imagine if cryptocurrency and blockchain were utilized to transform traditional value transfer and government benefit payment systems, where you could make those systems more fraud and corruption resistant,” Grigg said.

Chainalysis: DeFi Protocols, Law Enforcement Decentralize Crypto Money Laundering in 2021 - top government contractors - best government contracting event

Grigg will be moderating a panel discussion with digital currency experts at the Potomac Officers Club’s Digital Currency and National Security Forum on Thursday, Jan. 27.

The panel will include Hathaway Global Strategies President Melissa Hathaway, CipherTrace CEO David Jevans, Senior Investigative Council congresswoman Amanda Wick and Abaxx Associates CEO Eric Scofield.

Click here to register for the forum, which is also sponsored by Chainalysis.

ExecutiveBiz Logo

Sign Up Now! ExecutiveBiz provides you with Daily Updates and News Briefings about Cybersecurity

Executive Spotlight: PV Puvvada, CEO of NetImpact Strategies - top government contractors - best government contracting event
Executive Spotlight: PV Puvvada, CEO of NetImpact Strategies
USACE Vet David Leach Appointed Federal Civilian Programs Exec at Michael Baker International - top government contractors - best government contracting event
USACE Vet David Leach Appointed Federal Civilian Programs Exec at Michael Baker International