Crypto money laundering rises 30%, report finds

Criminals laundered $8.6bn (£6.4bn) of cryptocurrency in 2021, up by 30% from the previous year, a report by blockchain data company Chainalysis says.

It says police could strike a "huge blow" by targeting key services used to launder cryptocurrency by criminals.

The company previously estimated criminals received a record $14bn in cryptocurrencies in 2021.

The UK's National Crime Agency (NCA) told the BBC law forces are responding.

Chainalysis says it tracks cryptocurrency wallets controlled by criminals such as ransomware attackers, malware operators, scammers, human traffickers, dark net market operators, and terrorist groups.

By following flows of cryptocurrency from addresses associated with criminal activity, Chainalysis was able to estimate the amount "laundered".

It says most cryptocurrency is laundered through a limited number of services - for example, particular exchanges favoured by criminals - and shutting these could have a big impact.

The report notes that "while billions of dollars' worth of cryptocurrency moves from illicit addresses every year, most of it ends up at a surprisingly small group of services, many of which appear purpose-built for money laundering".

It adds: "Law enforcement can strike a huge blow against cryptocurrency-based crime and significantly hamper criminals' ability to access their digital assets by disrupting these services."

According to a Europol report, also published on Wednesday, criminal networks specialised in large-scale money laundering "have adopted cryptocurrencies and are offering their services to other criminals".

And Gary Cathcart, head of financial investigation at the NCA, said: "Whilst the vast amount of cryptocurrency use and exchange is for legitimate reasons, organised criminals have identified the benefits that cryptocurrency provides them.

"There are parts of the cryptocurrency structure that are being exploited to launder criminal cash, particularly from drug dealing. The growing menace of ransomware also utilises cryptocurrencies as its payment mechanism.

"Law enforcement is responding to this adoption by criminal gangs and cryptocurrency seizures are increasing. Legislative changes are also being progressed to assist with the response to cryptocurrencies being used in illicit finance practices."