A recent report by the blockchain research platform, Chainalysis, has disclosed that a total of $22.2 billion was laundered globally through various cryptocurrency exchanges in 2023. This figure marks a decrease from the $31.5 billion laundered through digital currency in 2022, as indicated by the analysis.
The decline in money laundering through cryptocurrency exchanges is attributed to a general reduction in the volume of cryptocurrency transactions, both legal and illegal, according to Chainalysis. Over the past five years, the report notes that cash transmitted from unlawful addresses has consistently ended up at centralized exchanges.
The analysis also revealed a shift in the distribution of money laundering service types, with a decrease in the percentage of illicit funds going toward these services. However, there was an increase in funds directed towards casino services and bridge protocols.
The report delved into specific types of cryptocurrency criminal activity, highlighting significant changes. Notably, there was a substantial increase in the volume of funds sent to cross-chain bridges from addresses associated with stolen funds. Additionally, there was a noteworthy rise in funds sent from ransomware to gambling platforms and funds directed to bridges from ransomware wallets.
Examining the concentration of money laundering at the deposit address level, the report found that 109 exchange deposit addresses received more than $10 million in illicit cryptocurrency on average in 2023, totaling $3.4 billion. While this still represents significant concentration, it is noteworthy that in 2022, only 40 addresses received over $10 million in illicit crypto, amounting to just under $2.0 billion.
In 2023, 1,425 deposit addresses received over $1 million in illicit cryptocurrency, totaling $6.7 billion, representing 46 percent of all illicit value received by exchanges for the year. This contrasts with 2022 when 542 deposit addresses received over $1 million, accounting for over half of all illicit value received by centralized exchanges that year.
