By Anna Irrera
LONDON – According to Elliptic, criminals are finding it increasingly difficult to use cryptocurrencies to launder money. Hundreds of millions of dollars of dirty money flowed through digital wallets last year, allowing users to hide their traces.
According to a study by a forensic digital currency company, at least 13% of all criminal proceeds in bitcoin have been transferred through privacy wallets, making it difficult to track cryptocurrency transactions.
Although cryptocurrency transactions are counterfeit, they are recorded in a public ledger called a blockchain, which makes it easier to track cash flows. Over the past decade, law enforcement has become better at tracking down illegal blockchain operations.
But privacy wallets, of which there are several types, are combined with anonymous cryptocurrencies, complicating the money trail.
“It makes it virtually impossible to get your money back, especially if you make a number of transactions through privacy wallets,” said Dr. Tom Robinson, Elliptic Chief Scientist. “This is a big challenge for law enforcement agencies. That means they are probably in a deadlock. ”
Most of the $ 120,000 Bitcoin raised as a result of hacking Twitter accounts in July went into a privacy wallet, as part of $ 280 million in cryptocurrencies stolen from the KuCoin Asian exchange in September, Elliptic found.
The study also describes the use of decentralized exchanges, platforms that are not run by a particular company, for money laundering.
Although the total amount of illicit activity of cryptocurrencies has grown dramatically over the years, it accounts for less than 1% of all digital transactions, up from 35% in 2012, according to Elliptic.