Cryptocurrency mixing platforms, also known as tumblers, have been experiencing increased usage from individuals who wish to obscure the origin of their funds, blockchain analytics firm Chainalysis said in its recent report.
Crypto Mixer Usage Driven by Illicit Activities
Chainalysis explained the increased inflow of transactions to such platforms, noting that the digital assets sent to mixers in 2022 were mainly driven by large volumes sent from centralized exchanges, DeFi protocols, and addresses connected with illegal activities.
The blockchain analysis firm stated that the addresses tagged with illicit activity made up a significant percentage of the total volume.
“The increase in illicit cryptocurrency moving to mixers is more interesting, though. Illicit addresses account for 23% of funds sent to mixers so far in 2022, up from 12% in 2021,” the company said.
30 Days Crypto Mixer Usage Hits New High of $51.8 Million
The global crypto crime rate has been on a steep rise, with bad actors constantly attacking protocols and making away millions of dollars belonging to investors, thus the spike in the usage of mixers as it is naturally attractive to criminals.
For instance, Coinfomania reported in June that the hacker who stole $100 million from exploiting Harmony Protocol used Tornado Cash, a popular mixing service, to move the stolen funds to prevent authorities from tracking the transactions.
Chainalysis stated that while the daily inflow of such activities fluctuates, the 30- day average reached a new high of $51.8 million in April.
“While the value received by mixers fluctuates significantly day-to-day, the 30-day moving average reached an all-time high of $51.8 million worth of cryptocurrency on April 19, 2022, roughly doubling incoming volumes at the same point in 2021,” the company said.
Crypto Tumbles Activities From Sanctioned Entities
In addition to the illicit addresses promoting the adoption of crypto mixers, the report noted that sanctioned entities have also greatly influenced the usage of such services.
According to Chainalysis, Hydra, a Russian darknet marketplace sanctioned in April by the U.S. Treasury Department, to curb the proliferation of malicious cyber crimes, contributed roughly 50% of all assets moved through mixers this year.
The blockchain firm also noted that almost all the remaining funds sent from sanctioned entities come from two groups associated with the North Korean government – the infamous Lazarus group and Blender.io.
The Lazarus Group is a notorious hacker who has spearheaded several exploits in the crypto space. In April, the U.S. Treasury linked the gang to the more than $600 million Ronin Network hack in March.
