Crypto, laundering at $7 billion. But malfeasance is only worth 0.34% of the total

About seven billion dollars. This is the figure, indicated by the latest Chainalysis report, which indicates the value of money laundering activities in the crypto world. Of course! It must be emphasised that, more generally, the amount of illegal activity, again according to the analysis company, is small compared to the entire bitcoin & Co. ecosystem. In 2023, for instance, it was worth 0.34% of all on-chain transactions. During 2021 and last year, on the other hand, conduct contra legem was 0.12 and 0.24% of the total, respectively. More. The many alarms, globally, launched by the authorities, correct from the point of view of defending the inexperienced retail investor, have not infrequently 'concealed' the more concrete - right or wrong - objective of defending the principle of monetary sovereignty.

Having said that, however, it is undeniable that - similarly to the fiat world - crypto assets are being exploited for criminal activities. Among them: money laundering. Yes, money laundering. According to the experts at Chainalysis, money laundering - native to crypto - is carried out in various ways. One of the most widespread consists of sending crypto assets that are the fruit of illicit activities to a myriad of 'personal intermediary wallets' (known as 'hops') in order to shield their provenance. Crypto money, a large part of which consists of stable coins. The reason? Because, obviously, criminals prefer to manage assets that do not change their value in the wake of changes in an all too often volatile market.

But it is not just a question of 'hops'. Another strategy, which moreover intersects with the one already described, consists in leveraging so-called 'mixers'. These, simply put, are services offered by platforms that 'mix' the funds of multiple users, creating a large pool of cryptocurrencies. The cryptocurrencies thus mixed are, then, sent to new addresses provided by the users, but in quantities different from the original amounts. As a result, it becomes difficult - if not impossible - to trace the original path of the funds. In general, 'mixers' can be legally exploited in order to ensure anonymity.

It is evident, however, that the mechanism is also used to conceal the illicit origin of the digital assets themselves. That illegal origin which, on closer inspection, can be concealed through another system: the use of 'cross-chain bridges'. What is this all about? In this case we are dealing with protocols that allow - through smart contracts - the transfer of assets and data between different blockchains. This type of technology is essential to improve interoperability between different blockchains, allowing users to move securities without having to go through a centralised exchange. In general, therefore, 'bridges' are in themselves absolutely useful in the crypto world.

However, similar to mixers, they are also exploited for money laundering. The criminal, for instance, can split funds into smaller amounts and transfer them across different blockchains. This process, known as 'layering,' complicates asset tracking. Not only that. By moving cryptocurrencies between various blockchains - which have different technologies - their origins are obfuscated. This mechanism is facilitated by the fact that several 'bridges' do not require customer identification or 'anti-money laundering' measures.