Cyber Criminals Increase Usage of Crypto Mixers to All d4k5m Time High: Chainalysis

Crypto mixers are privacy tools that remove any digital signatures associated with a trade and allow complete anonymous crypto transactions between two wallets. 4h5w1c

By Radhika Parashar | Updated: 18 July 2022 13:58 IST

Cyber Criminals Increase Usage of Crypto Mixers to All-Time High: Chainalysis

Photo Credit: Pixabay/ Mohamed Hassan 2w5b1q

Funds sent to mixers by Russian and North Korean groups have risen dramatically in a year

Highlights

Crypto exchanges do not often ask for KYC details
Crypto funds from gambling platforms also reaching mixers
Crypto mixers may end up becoming obsolete, Chainalysis study predicts

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The percentage of funds ing through crypto mixers from the custody of cyber criminals touched $51.8 million (roughly Rs. 413 crore) in April 2022. This marks the highest volume of crypto funds so far to have been wired to destination wallets via crypto mixers. These crypto mixers are privacy tools that remove any digital signatures associated with a trade and allow complete anonymous crypto transactions between two wallets. These tools have become popular among scamsters who wanted to hide the source and final destination of their crypto exchanges.

More often than not, crypto mixers do not ask for Know-Your-Customer (KYC) information, that make them appealing for scammers churning capital from duping non-suspecting investors.

“Nearly 10 percent of all funds sent from illicit addresses are sent to mixers — no other service type cracked a 0.3 percent mixer sending share,” a report by Chainalysis said.

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decentralised finance, as well as centralised exchanges are also being routed to destination wallets via crypto mixers.

In a normal BTC trade for instance, the coins go from person A to person B and the transaction is recorded on the blockchain.

With a crypto mixer however, person A wires their holdings into a private pool. The deposited virtual tokens are then mixed with other people's tokens before being transferred to the destination – person B.

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Blockchain validators, whenever they check these transactions—will be able to see that BTC was sent into a mixer by person A. They will also see that these tokens reached person B, but there will be no transaction links between the two parties involved.

“The increase in illicit cryptocurrency moving to mixers is more interesting though. Illicit addresses for 23 percent of funds sent to mixers so far in 2022, up from 12 percent in 2021,” the report noted.

In fact, funds sent to mixers by cyber-criminal groups linked to Russia and North Korea, have risen dramatically between 2021 and 2022.

“Russian darknet market Hydra, which was sanctioned in April 2022, leads the way here, ing for 50 percent of all funds moving to mixers from sanctioned entities this year,” Chainalysis added.

Blender, ChipMixer, FoxMixer, and Anonymix are some examples of crypto mixers available out there.

Earlier this year in February hacked, and losses worth $1.7 million (roughly Rs. 12.5 crore) were reported.

At the time, PeckShield security firm claimed that privacy mixer tool Tornado Cash was used by the OpenSea hacker(s) to wash 1,100 ETH. Tornado Cash can hide the final destination of the Ether tokens that were stolen.

While crypto mixers are not really illegal, they could be dragged under the legal scanner depending on where the is from and the laws applicable there.

Governments of the US and the UK have arrested crypto mixer s and have also laid out rules – marking these tools as less viable for regular of the crypto community.

Crypto exchanges can also flag details of those s who use crypto mixers very frequently to carry out transactions.

The study however, claims that crypto mixers may soon become useless for scammers to use because firms like Chainalysis continue to demix transactions and see the original source of funds.

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Further reading: Crypto Wallets

Radhika Parashar

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Radhika Parashar is a senior correspondent for Gadgets 360. She has been reporting on tech and telecom for the last three years now and will be focussing on writing about all things crypto. Besides this, she is a major sitcom nerd and often replies in Chandler Bing and Michael Scott references. For tips or queries you could reach out to her at [email protected]. More