New research published by analytics firm CipherTrace has revealed that the buzz surrounding cryptocurrencies did not just attract investors but thieves as well. According to the Q2 analysis of 2018, the first half of the year saw nearly three times as many tokens stolen as in all of 2017. Since all of these funds had to be laundered, the techniques of doing so have evolved as well.
The report details money laundering practices used by cryptocurrency thieves to get away with their crimes. According to CipherTrace, the first step involves “layering” the stolen funds with the use of mixers, tumblers, and chain hopping. Some also decide to use the illicitly acquired token for gambling and make simple bets to break up the funds' flow trace. Eventually, the thieves attempt to integrate the laundered funds into the mainstream financial system. All of these practices make it increasingly complicated for investigators to identify the “dirty crypto money.”
Thankfully, the rise in criminal activity has not gone unnoticed by the regulators. The report details that US FinCEN has expressed their plans to enforce anti-money-laundering regulations on a global scale. Moreover, FATF has placed similar regulations as a priority for the near future.