According to Chainalysis, money laundering in the cryptocurrency business surged by 30% in 2021 compared to 2020. Last year, $8.6 billion was laundered through cryptocurrency, a $2 billion rise over the previous year.
According to a new analysis produced by blockchain and cryptocurrency intelligence firm Chainalysis, money laundering in the cryptocurrency industry surged by 30% in 2020 compared to the previous year. The tweet comes before of the firm’s next 2022 Crypto Crime Report, which is scheduled to be issued in February.
According to Chainalysis, money laundering “underpins all other forms of cryptocurrency-based crime.” According to the report, money laundering activities in the cryptocurrency industry is extremely concentrated, with all funds ending up tied to a small handful of businesses.
In 2021, a total of $8.6 billion was laundered, up from $6.6 billion in 2020. This is still less than the $10.9 billion recorded in 2019, which could be attributed to law enforcement agencies tightening down on crypto-related money laundering operations. Although the firm is careful to point out that money laundering impacts all types of economic value transfer, the majority of the money laundered since 2017 appears to have ended up at centralized exchanges.
Governments are keen to curb criminal financial operations involving cryptocurrencies while also developing wide market frameworks. In a letter to the U.S. Treasury, U.S. Democratic Senator Dianne Feinstein inquired about the role of cryptocurrencies in human and drug trafficking.
According to the IRS, NFTs are also implicated in fraud. Crypto and NFTs, according to the agency’s criminal investigators, can assist money laundering, market manipulation, and tax fraud. The IRS is also working on methods to prevent illegal activities.
The year 2022 will see a significant increase in regulation.
All indications lead to considerably greater regulation for the crypto industry, particularly in the United States. Authorities in the country have stated unequivocally that they will establish certain market controls. The Biden administration is said to be drafting legislation through executive order.
The SEC, which will regulate much of the market, has also been forthright about regulation. SEC Chair Gary Gensler has identified cryptocurrency exchanges as a key priority for investigation.
However, few governments are considering a total prohibition. One encouraging finding is that governments are ready to let the market to function, albeit with some limits and rigorous scrutiny.