Chainalysis identifies main users of Bitcoin mixers in 2022

Activity in the use of cryptocurrency mixers doubled in 2022 compared with the previous year, according to a report by analytics firm Chainalysis.

In April, the 30-day moving average reached an all-time high of $51.8 million. According to analysts, the most active mixer users this year have been cybercriminals and state actors under sanctions.

“Illicit addresses account for 23% of funds sent to mixers in 2022, compared with 12% in 2021,” Chainalysis reports.

Analysts note that there are legitimate reasons to use mixers, including trading cryptocurrency under an oppressive government or anonymizing legitimate but confidential transactions.

“However the primary functionality of such services, combined with the fact that they rarely request KYC information, makes them attractive to cybercriminals,” the researchers added.

Mixer activity in the United States is classified as money transfers under the Bank Secrecy Act. Such transactions must be registered with the FinCEN and implement an anti-money-laundering program. However Chainalysis is not aware of any mixers currently complying with KYC/AML procedures.

The funds received by mixers largely come from centralized exchanges, protocols and DeFi addresses linked to sanctioned countries, the dark web, and hackers such as North Korea’s Lazarus Group.

Analysts, however, do not rule out that in the future the popularity of such services could decline due to the ability of analytical tools to de-mix certain transactions and trace the original source of funds.

< p>Earlier in May, the U.S. Treasury added to the sanctions list the cryptocurrency mixer Blender.io and related Bitcoin and Ethereum addresses. According to the agency, the service helped launder funds stolen by North Korean hackers and was allegedly involved in ransomware attacks.

Blender received about $20.5 million of the $622 million, stolen in the Axie Infinity Ronin cross-chain bridge hack.

In June, cybercriminals sent $36 million in Ethereum from the Harmony Protocol Horizon bridge to the Tornado Cash mixing service. Analysts point to several reasons suggesting that North Korea’s Lazarus Group was behind the hack.

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